Taking Back Control?:
States and State Systems After Globalism
By Wolfgang Streeck
Verso, 416 pages, $34.95
The most significant transformation in politics on both sides of the Atlantic in the last 20 years has been the left’s acceptance, even embrace, of globalization. In the 1990s, social movements against global sweatshops and ecological damage by irresponsible multinationals presciently warned that a system of constant capital mobility, backed by norms and rules codified by international bodies such as the World Trade Organization, would empower a new oligarchy immune to challenges from below.
By the mid-2010s, amid Brexit, Donald Trump’s first victory, and the backlash against Angela Merkel’s liberal migration policy, a new approach to globalization had become dominant on the left: one that equated skepticism about it with regressive chauvinism, and viewed a system of uniformly open economies as paramount to global human welfare. Only a dwindling minority of progressives maintained that nation-states, despite their flaws, still constitute the best means to inscribe democratic principles into economic life.
The disrepute that threatens the latter camp hasn’t stopped its intellectuals from speaking out. Among these, none has more stubbornly mounted a left-wing case for sovereignty than the influential German economic sociologist Wolfgang Streeck, former director of the Max Planck Institute for the Study of Societies. At 78, Streeck—a one-time adviser to the government of Chancellor Gerhard Schröder and an informal guide to the “left-conservative” politician Sahra Wagenknecht—owes his late-career prominence to several provocative essays and books published in the wake of the 2008 global financial crisis.
More recently, he has fallen out of favor on the left for his idiosyncratic communitarianism and opposition to what he has called “uninvited immigration.” Nonetheless, an understanding of social democracy’s decline would be incomplete without his acerbic analysis of the consolidation of neoliberal governance in the face of popular unrest, the decay of economic security and traditional working-class political agency, and the undemocratic nature of the European Union and eurozone.
Taking Back Control?: States and State Systems After Globalism, Streeck’s latest book, is both a summation of those core themes and a new undertaking combining theories of international political economy and international relations. As the title suggests, Streeck is invested in imagining a path out of the policy straitjacket jointly imposed by the Washington Consensus and Brussels. He outlines a renewal of social citizenship through reclaimed sovereignty, buttressed by cooperative multipolarity. In other words, a world system that safeguards democratically determined production and distribution against an agglomeration of power by either a traditional hegemon or supranational institutions.
“This isn’t an isolationist tract nor a rejection of universal values.”
Importantly, this isn’t an isolationist tract nor a rejection of universal values. Streeck is indisputably a believer in the universal imperative to restore social rights, affirm national self-determination, and fulfill the right to development. His contention, however, is that globalization demands what the libertarian economist Friedrich Hayek called “isonomy” for enterprise above all other human and political considerations. It thereby stifles or circumvents the means of open deliberation within polities regarding their economic choices; and it permits the continuous upward transfer of authority to “private hierarchies” and their allies among unelected bureaucrats and international organizations—all under the pretense of free markets, individual liberty, and freedom of movement.
How did these “private hierarchies” gain such unprecedented leverage? Drawing inspiration from the economic historian Karl Polanyi, Streeck considers how “the political institutions of states, especially their democratic institutions,” are intimately connected to “their system of foreign trade.” This dynamic, in turn, both shapes and is conditioned by the evolving “architecture of the surrounding global state system.” Since the late 1970s, this architecture has compelled states that wish to belong to the “US-led international community” to prioritize the interests encompassed by their expanding systems of foreign trade over other developmental concerns.
Hyperglobalization ensued, in which the far-flung supply chains of multinationals, along with an army of creditors, supplanted more politically endogenous and state-directed forms of development. The result often was the opposite of what was promised. As is now widely recognized even by some of globalism’s former apologists, the productive basis of shared prosperity in many communities was demolished through trade agreements, while the economic diversification of the Global South was obstructed by structural adjustment programs imposed by the International Monetary Fund and World Bank. The Hayekian demand to equalize market access between nations, though subverted significantly by China, may have flooded the world with goods at a scale inconceivable a half century ago; but for most it failed to equal, let alone surpass, the leaps in human welfare achieved by mixed economies.
Western societies’ acquiescence to this process reflected an odd mix of perceived self-interest and vague moral obligation. Streeck argues that “a notion of solidarity was smuggled into the public consciousness, by which the refusal of the working class” to compete globally “could be presented as a betrayal … of international solidarity.” This gave a certain moral cover to the depoliticization, in particular, of fiscal, monetary, trade, and labor policies. But it is also true, as Streeck has previously written, that the “attrition of the public sphere” compelled those who were dazzled by the possibilities of “post-Fordist affluence” to conform to market pressures when and where they could. Liberalization, after all, connoted yet new frontiers for growth and opportunity after the crisis of Keynesianism.
The common retort to Streeck’s critique is that the politics of globalization needlessly failed certain communities but that the net reduction in inequality between countries and multistate regions is a statistical triumph. Yet as Streeck illustrates, the China miracle at the heart of any qualified defense of globalization can’t mask what it was in practice: a more conceptually palatable version of trickle-down economics that briefly roused the optimism of voters before the evidence was in. “Since 1992,” he observes, “almost 50 percent of the imports and 30 percent of the exports of the American economy took place within firms, a proportion that is even more striking in the case of services alone.” Between corporate raiding, asset inflation, and oligopolistic consolidation, an unfathomable amount of global capital has been concentrated in a very few hands. As such, wealthy and once-industrializing countries have converged, not in impressive developmental outcomes, but stagnation.
Compare this to what was achieved in the social-democratic era and its American equivalent, the New Deal order. The mixed economies of Western Europe and North America were afforded some degree of autonomy from external market pressures, which therefore disciplined domestic capital (and foreign subsidiaries) to follow a pattern of fixed reinvestment, while limiting the concoction of speculative and arcane financial instruments; trade liberalization, though championed by the dominant wings of both political parties in Washington, was largely incremental and generally supported by working-class electorates on the basis that it would foster their mutual development and rising prosperity.
Streeck envisions emulating that earlier postwar model, but moving in a decidedly more autarkic and non-capitalist direction. Only the ideal “Keynes-Polanyi State,” he writes, “can be the instrument of the protectionism that every society wishing to remain one needs” (my emphasis). In his estimation, the threat posed by the current global economic regime to social cohesion and any sense of common purpose within countries can’t be exaggerated. As evidenced by the unrest and alienation that pervades the West, the maximally competitive world order that was reified after the fall of the Soviet Union through corporate-friendly international law and international organizations has made it nigh impossible for individual countries to preserve a social contract independent of the dictates of transnational finance and mainstream economists’ preoccupation with efficiency.
“Any renewal of social democracy must recognize sovereignty as a precondition of its goals.”
Accordingly, any renewal of social democracy must recognize sovereignty as a precondition of its goals. Arrangements that might punish economic predation, decommodify labor, and generally allow societies to reimagine the common good as something greater than, and even untethered from, conventional economic metrics—these can only succeed, in Streeck’s view, if the “foreign economy” is subordinate to the pursuit of internal collective needs. “Unlike the neoliberal state model,” he writes, “the Keynes-Polanyi state has a general preference for the greatest possible internalization of economic and operational interconnections, even at the expense of economic efficiency, provided that this can be offset by non-material gains of greater value.” He adds: “States on the Keynes-Polanyi model are protectionist in a strict sense, insofar as they are prepared to sacrifice economic values to protect non-economic ones, such as the minimization of collective external dependency or the preservation of a minimum of social stability and continuity.”
That focus on “external” dependence is crucial. Once democracies surrender control of their sectoral distribution, labor markets, and welfare policies to “universal” yet ever-changing metrics of efficiency and profitability, they have little choice over who they must exchange with. Nor, for that matter, do they have any meaningful discretion over which entities create employment and under what terms. Such openness allows multinationals to mercilessly conduct labor arbitrage throughout supply chains, encouraging a race to the bottom at home and abroad, while allowing transnational oligarchs and private equity to snap up vital resources, including housing and land.
The frequent conflation of openness with worldliness, however, is a powerful tool with which to smear all opposition to globalism as reactionary. This only further eases policy capture: In Streeck’s schema, greater openness, encouraged in public discourse as a matter of enlightened middle-class values, correlates with the insulation of economic governance from genuine public oversight. Our final traces of self-government, in short, become a mirage, tenuously perpetuated by routine elections of vanishing consequence.
Democracy, therefore, can’t survive unless citizens are able to substantially renegotiate their social contracts—and thus reassert the legitimacy of popular sovereignty. The best hope for this, according to Streeck, lies with smaller states and even possibly subnational, semiautonomous units. Yet the devolution of power away from the market’s centralizing institutions can only happen in an international system that encourages “regional planning” within and between states, free from the pressure to replicate market structures and legal systems. “Small-statism, or restored distributed sovereignty, as a way out of neoliberal stagnation,” Streeck writes, “requires a supportive international order.” Just as the democratic nation-state must affirm pluralism while maintaining the idea of the whole, so, too, must the state system respect heterogeneity in the world economy while still enabling, as the Old Left broadly intended, internal development within countries, as well as economic collaboration between them insofar that it befits stability and peace.
Such an alternative system, Streeck emphasizes, would be fundamentally different from the pseudo-internationalism of market integration as propounded by left- and right-neoliberals. Because of the premium placed on sovereignty, cooperation would be ad hoc and delimited; any greater continuous form of “interdependence,” however noble-sounding, would have to avoid reproducing the enmeshment of public bureaucracies and private hierarchies witnessed in the neoliberal era.
Taking Back Control? arrives at a perilous moment in world history, bearing a politics and view of recent global events unlikely to win many new adherents despite Streeck’s egalitarian prescriptions. Beyond obvious questions about his vision’s feasibility, some readers might raise concerns about what Streeck’s emphatic support for deglobalization implies for international human rights or global climate policy. What we have glimpsed thus far of deglobalization looks like, well, the hot wars in Ukraine and the Middle East and the escalating cold war with China. This instability has made many people, including nominal opponents of neoliberalism, long for the halcyon days of peak globalization, even though every decade since the purported peace dividend of 1989-1990 has brought us to this point—and seen multiple wars of devastating consequence besides.
Another source of tension stems from the way in which global governance has supplanted an earlier conception of left-wing internationalism. Among left-liberal opinion-makers, it has proved easier to critique globalization while urging remedies centered on combatting tax evasion than to propose a more systemic overhaul predicated on economic self-determination. A partial manifesto for radical delinking, permeated with distrust of multilateralism in most of its current forms, will strike some as too sanguine about the potential for peace and equality within and between nations, given the dangers commonly (though not always accurately) associated with multipolarity.
Streeck’s sympathies, moreover, don’t neatly align with any prominent political-ideological persuasion. Some progressives may view his defense of sovereignty as inconsistent and shading into justification for traditional geopolitical spheres of influence, including Russia’s. He is alarmed, in particular, by the Biden administration’s Ukraine strategy and sees Washington displacing what little remains of European sovereignty. Streeck’s view of China is more ambiguous, though he sees Russia becoming its “Eurasian dependency.” On Israel’s expanding fronts against its neighbors, his moral revulsion is equal to his premonitions about geopolitical anarchy.
Still, Streeck seems increasingly at home with a “left conservatism” that many on the left view as a betrayal of cosmopolitan values. While he doesn’t dwell on migration in the book, the ability to regulate the labor market in all respects is obviously integral to his concept of economic sovereignty. Open borders, as Streeck has variously suggested, are part and parcel of a regime of coercive openness that forbids states from imposing capital controls, including barriers to goods and services that destabilize domestic employment and undermine the efficacy of national and regional developmental projects.
This regime, so long as it stands, hinders the development of poorer countries, given their dependence on the foreign economy of remittances from exploited but comparatively better paid expatriates residing in wealthier countries, while eroding the last credible vestiges of working-class power in the Global North and Global South alike. Whether one agrees with or objects to Streeck’s preference for more tightly regulated immigration, his aversion to open borders must be understood as anchored in his opposition to imperialism and economic domination.
There is, finally, a leitmotif of hostility to modern consumer culture in Streeck’s philosophy that further lends it a uniquely conservative disposition. Due to the unfettered profit motive, Streeck writes, hyperglobalization has overwhelmed local ways of life, typically disposing of supposed inefficiencies, while subjecting all within a common market to more invasive forms of commodification. It has correspondingly made consumerism ubiquitous and compulsive at the same time that it has vitiated social rights and regulations. The result is a dystopia in which debasement and servility have all too often been the fruits of “liberation” and “self-actualization.” Whereas mass democracy—along with its rival, state socialism—aspired to mold economic activity to common needs while limiting its demands upon an individual’s time and effort, Streeck writes, societies are now “embedded in global markets” in which most economic boundaries and proscriptions are considered by a transnational elite to be arbitrary and inimical to the supremacy of the right to sell and the right to buy.
“Elites everywhere fear citizens awakening to their rights.”
One would fervently hope this state of affairs cannot drag on much longer. Ultimately, however, the passage to a different, more just system of political economy—domestic and international—demands a left willing to bury the Thatcherite axiom that “there is no alternative” to a borderless and totalizing market system. That begins with reckoning with sovereignty’s radical-egalitarian potential, as well as that of the “great unwashed”—the voters who, in the author’s telling, have expressed their repudiation of elites by supporting populist causes and candidates.
In a recent interview with Die Zeit, Streeck said, “I am deeply egalitarian. For me, the life experience of every person is equally valuable, which is why in a democracy, everyone … has exactly one vote and only one vote, not weighted by high-school grades. Anyone who challenges that cannot be my friend.” In a world in which elites everywhere fear citizens awakening to their rights, we can only hope the left will reclaim this principle before long.