Wallerstein on The Financial Crisis
October 11th, 2008 by SocProf and tagged Economy, Global Governance, Global Imaginary, Globalization, Ideologies, Immanuel Wallerstein, Mass Violence, Politics, Risk Society, Social Theory, Sociology, World-System Analysis
Immanuel Wallerstein (commentaries, Wikipedia), who’s been predicting the end of capitalism for the past thirty years, gave an interview to Le Monde on the current financial crisis, especially in the context of Braudel’s concept of "longue duree" and the history of the world-system.
In Braudel’s conception of the longue duree, the history of humans, systems which regulate relationships between humans and their material environment. Within these phases, there are long cycles described by Nicolas Kondratieff or Joseph Schumpeter. For Wallerstein, we are now in the B-phase of the Kondratieff cycle which started roughly 35 years ago. The A-phase (1945-1975) has been the longest in the history of the capitalist system.
In phase A, profits are generated through material or industrial production. In phase B, in order to keep on generating profits, the capitalist system needs to increase the use of financial and speculative tools. In the past thirty years, states, businesses and households have gone into massive debt. For Wallerstein, we are now in the last part of a B-phase of the Kondratieff cycle. Virtual decline becomes real and bubbles burst one after another In these conditions, we see more bankruptcies, greater concentration of capital, increased unemployment and recessionary conditions.
What makes things worse is not simply this cyclical moment but its combination with the transition between two systems over the longue duree (one being capitalism). The system is no longer capable of returning to equilibrium. This is where things become chaotic and uncontrollable. The struggle becomes then between competing views of what will replace that system. This is really a crisis. And the end of capitalism.
But is it not a new mutation of capitalism? After all, capitalism has undergone dramatic transformation ever since the rise merchant capitalism to global financial capitalism.
No, for Wallerstein, because the system has reached its limitations. There are no more opportunities of real accumulation and profits at this point (biotechnologies and information technologies were the last sources of growing profits as emerging sectors). What is left is the capacity of capitalism to feed off global inequalities but how low can we go in the periphery?
At the same time, the economic emergence of the Asian tigers as well as India and South America presents a challenge to the world-economy created by the West where costs (both labor and resources) become harder to control. By the end of the 1990s, these costs were lower than in the 70s but still higher than right after WWII. Actually, the last period of actual accumulation was only possible because of Keynesian policies of massive government intervention. And here too, limits have been reached, as the current crisis demonstrates.
Wallerstein sees similarities between the current crisis and the collapse of the feudal system in Europe in the middle of the 15th and 16th centuries, with the replacement with the capitalist system. With religious wars, come the collapse of monarchical and aristocratic authority over wealthy farmers and urban dwellers.
So, how long are we going to be in this mess? For Wallerstein, this destructive period which closes the b-phase of the cycle usually lasts between two and five years before the conditions of a phase A are met (possibilities of real accumulation through material production). But the fact that the current phase is also a systemic crisis means that we can expect political chaos where dominant political and economic actors will try everything to regain equilibrium. But according to Wallerstein, they will fail.
In this period of transition, it is impossible to predict what the new system will look like, and there is definitely no certainty that we’ll end up with a less violent and more just system. It could be the opposite.
And of course, this is also the end of a political cycle, that of American hegemony, which started in the 1970s. The US will always be an important political actor but not in a dominant position in the context of the multiplication of centers of power in Western Europe, China, Brazil and Idia, for instance.
In the meantime, the political and economic consequences will be painful. The dominant actors in this system will look for scapegoats (the government, the banks, the Black, the CRA…).
Wallerstein predicts that conflicts internal to the US will be exacerbated by the situation and this country might become one of the most politically unstable. As he concludes
"And don’t forget, in the United States, we’re all armed…"
Posted in Economy, Global Governance, Global Imaginary, Globalization, Ideologies, Mass Violence, Politics, Risk Society, Social Theory, Sociology | 6 Comments »
October 12th, 2008 at 8:50 am
Okay, I think I can plug this into the discussion about our current financial disaster. I’ve been a great supporter of Naomi Klein and her intellectual works. I would encourage anyone to come and see how much there is on Youtube if you do a simple search “Naomi Klein”. This is important for sociology becuase it shows how the public sphere is in a transition and being filtered via new communication technologies like MySpace, Youtube,etc.
Here are a few recent posts on youtube featuring Naomi klein which I find to be interactive and educating (I had to edit this beacuse I got a red flag when trying to post this)
Nowadays, i think it would be fruitful and sociologically beneficial to begin to integrate discussion(s) in all of the various communication techniques available. I do have several ideas and have been trying to turn these into my little play projects for some time now. First, I think that (as sociolgists) we have every right to be mentioned in the news media and public outlets , just as much as news anchors, weather presenters , and sports broadcaster. The other day I was watching a local news reports and noticed that one of the anchors only has a bachelors degree and was talking about the financial crisis like she came out of middle school.Sociologists ought to be included in the discussions.Sadly, this is not the case and we have been placed on the margins of the public sphere. My argument is that we should move ourselves back into the middle (like Naomi Klein).I really want to put stuff all over youtube — even if its just going to be two weird people talking randomly on the differences between radical feminists and/or european traditions in neo-marxist schools.If anyone has any ideas or comments please do share them.
Reading suggestion:
On Television/ Pierre Bourdeiu 1999
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October 12th, 2008 at 8:54 am
Okay I fixed the problem.Click on my “crtiticalcontexts” button and you’ll see the Naomi klein posts I was talking about and would suggest people to look at to get some ideas about what we could do to stir up the hornets nest on the net.
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October 12th, 2008 at 7:00 pm
I completely agree regarding Naomi Klein.
On social issues in the media (I reported on this based on a session I attended at the ASA last August, one of the problems is that them media recognize only three types of social scientists: political scientists, economists and psychologists… no sociologists.
Why that’s the case? I’m sure a variety of reasons: economics and psychology have worked hard to establish themselves as “hard sciences”.. sociologists are often seen as more social workers or activists or aging hippies (and quite frankly, looking at ASA meetings, that looks true).
Also, very few people in the media understand what sociology does, compared to econ and psych..
Finally, economists rarely challenge the capitalist system and psychologists reinforce individualist / biological determinist explanations for behavior. Both sustain the ideological underpinnings of the system.
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October 12th, 2008 at 8:32 pm
Where can I find this interview?
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October 12th, 2008 at 8:35 pm
Oops… sorry, I forgot to insert the link: it’s here.
It’s in French, of course.
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October 13th, 2008 at 7:47 pm
c,
that still remain critical to the powers that be, however we haven’t been really recognized as public intellectuals in the same tradition of Pierre Bourdieu and Andre Gorz, or even Ulrich Beck and Anthony Giddens,etc.
As always, Thanks for responding to my usual noise. I guess what I really wanted to say is that the role of sociologists as ,AKA. public intellectuals has been on a steady decline for decades now. There are a few good sociologists ones (like yourself
Let me also briefly comment on this remark:
“Why that’s the case? I’m sure a variety of reasons: economics and psychology have worked hard to establish themselves as “hard sciences”.. sociologists are often seen as more social workers or activists or aging hippies (and quite frankly, looking at ASA meetings, that looks true)”.
Very true. There is one thing, however, that I think is still overlooked here.Partially, the idea that(nation-based) sociology is turning into a museum piece altogether. As an example, both of us are sorta like European transnationals who are working and living in the United States.To my knowledge, very little is written about the transnational classes and their feelings about living within the spaces of two different societies. The boundaries here are very clear to me. Social sciences only discuss things within national boundaries and from within the national container. Thus,they have a difficult time in seeing the “other” dimesions that exist within “other” life worlds.Likewise,I really enjoyed it when you were saying that old social workers and aging hippies make up a larger portion of ASA meetings. I think we really have to break some of the old negative stereotypes associating us with some sort of old (anti-establishment) movement. One of the things that Ive been doing lately in my classes is holding discussions on hip hop and other new music forms and how these are forming new public discourses and political messages that differentiate from the 1960’s culture and protest music scene.
Lots of fun class discussions!!!!!!!!
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