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  1. The Weekend Interview
13 January 2024

Get ready for the worst

Germany’s political crisis is a warning for Keir Starmer.

By Wolfgang Streeck

Gavin Jacobson: Let’s start with the mood of discontent in Germany, reflected in the various strikes (rail workers), protests (farmers), and demonstrations (Palestine). How ominous is the hard-right Alternative for Germany (AfD)’s call for a general strike?

Wolfgang Streeck: I haven’t even heard of it, clearly because I don’t regularly read British newspapers, with their typically sober, well-informed, level-headed reporting on Germany. There obviously is a lunatic fringe at the right end of the German political spectrum, even more lunatic than the friends of Liz Truss, I suppose, and certainly creepy and spooky enough not just for the media but also for the ruling parties, which are desperately looking for ways to scare voters off from voting AfD.

The hype is unbelievable: I’ve seen this bizarre “remigration” meeting in a Brandenburg hotel last November, in which two or three AfD functionaries discussed with an Austrian identitarian a “master plan” for mass deportations of insufficiently German Germans, compared to the 1942 Wannsee Conference. The whole episode, and the overblown reaction to it, is similar to the [dozens of] pensioners the police arrested [in 2022], led by a senile Graf von I-don’t-know and a mad housewife who were planning a revolution in Berlin – the Graf to be appointed Kaiser or something like this. You can sleep in peace tonight.

GJ: What’s your theory of the AfD? What explains the growing support for the party and where do you think it’s going?

WS: It’s a general phenomenon, from Norway to Italy, and also in the UK and the United States, where the local brand of right-wing populism has found a home in the old conservative parties of the centre, the Tories and the Republicans. Everywhere, it indicates a widespread discontent with the established party system, centre left and centre right, and with left-of-centre socialist parties as well. (In the UK and Spain and some other countries, regional separatism offers another outlet for disaffection with neoliberal democratic politics.) Underlying this is a deeply felt uncertainty about the future, a sense of rapid unpredictable change upsetting traditional ways of life. People feel abandoned by liberal-democratic government; they feel thrown into a maelstrom of social upheaval and look for a new kind of political protection, having lost confidence in traditional politics. Of course, [Giorgia] Meloni, [Marine] Le Pen, [Donald] Trump and company won’t protect them either – far from it. But it will take time for them to notice – maybe a decade or two?

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GJ: How do you link the political situation in Germany to the general crisis of capitalism?

WS: Again, leaving aside national specificities, that “general crisis” makes itself felt today as a crisis of the state being overwhelmed by demands on its governing capacity that it cannot possibly satisfy. One indication of the nature of this crisis is the helpless wavering of economic policy in the past half-decade between state intervention and state abstention, and the unending experimentation with all sorts of combinations between the two. None of them has been able to address the growing problem or keep it from growing further.

What is behind the unending crisis is, in brief, what Marx calls the advancing socialisation of production in societies, in which the means of production continue to be privately owned. As capitalist societies mature, more and more areas of social life, including private profit-making, need to be both regulated and facilitated by public government; at the same time, capitalist property relations, in particular under globalised capitalism, keep states from acquiring the means they would need to provide for a collective infrastructure for advanced capitalist production, repair the damages caused by capitalist “creative destruction”, and secure the political legitimacy it requires in a democracy. One expression of this is an endemic and worsening fiscal crisis of the capitalist-democratic state, resulting in a widespread perception among its constituents across the board of state failure. There are all sorts of political pathologies involved in this that I cannot however spell out here.

GJ: What are your views on Sahra Wagenknecht? Is her party, Sahra Wagenknecht Alliance – Reason and Justice, a source of optimism or, as the sociologist Oliver Nachtwey has recently written, merely “a new form of Bonapartism” that reflects the reactionary sections of the middle classes?

WS: Remember that Sahra Wagenknecht is not running for emperor, and as far as I know there is no putsch being planned, at least not for the time being. I see her party as a democratic-egalitarian offer to those who feel no longer represented by the political mainstream: an alternative to the authoritarian-neoliberal alternative. One may hope that Wagenknecht will succeed where the established parties have so dramatically failed: in ending the growth of the AfD, which has been going on for a decade now under the watch of the CDU [Christian Democrats], SPD [Social Democrats], the Greens and company.

At the federal level, if all goes well, the new party can be expected to bring an element of honest realism to the public discourse, with serious, hard-hitting, mercilessly inquisitive parliamentary opposition to a government that has done nothing to end the crisis of the physical infrastructure, the decay of the school system, the damage caused by climate change, the housing shortage, the rise in poverty at the lower end of the income distribution, the vassalage to the United States in foreign policy, the drifting apart of the European Union and so on. And in the eastern Länder [German federal states], three of which will elect their parliaments this year, Wagenknecht may pull enough voters away from the AfD to prevent it from becoming the largest party and ensure that a viable parliamentary government can be formed, perhaps even as a coalition partner.

[See also: Are you ready for Elon Musk to read your mind?]

GJ: How sustainable is German support for both Ukraine and Israel?

WS: I’m not in the predictions industry. The Americans are envisaging Germany, bringing along the EU, to take over their role in the war in Ukraine while they move on to Palestine, Iran and China. If the Germans cannot deliver, for political or practical reasons, and the war ends in a mess – the fall of the present nationalist-extremist Ukrainian government, the abandonment of the Ukrainian state by the Ukrainian oligarchs and their exodus to London or New York, and generally a politically, economically, democratically and demographically unviable residual Ukraine being permanently harassed by Russia – then the US and the eastern member states of the EU have Germany to blame; good for them.

As to Israel, the German state is using all its available means to propagate a popular and legal identification of any expression of horror over what is going on in Gaza and the West Bank with anti-Semitism, hoping that this will suppress public debate on its unremitting support for the Israeli government’s war crimes. I believe this will do lasting damage to Germany as a liberal democracy. For example, there is now an entire generation of young journalists and social scientists learning that if they want to have a career, they must learn to pretend not to see something everyone else sees, and not to talk about it for staatsraison.

GJ: What would a hard-right Germany and France mean for the European Union?

WS: The AfD won’t be in the federal government after the next election – I’m tempted to say, after any election. There won’t therefore be a “hard-right Germany”. Le Pen, on the other hand, might be president, but there are, if you wish, “hard-French” national interests, not least in remaining the only EU member state with nuclear arms and in defending France’s seat as a permanent member of the UN Security Council. Germany, on the other hand, is, after the wars in Ukraine and Palestine, more than ever an American dependency charged, among other things, with running the EU in line with American transatlantic interests – unless a re-elected Trump gives up on Europe altogether, which is not unlikely; then all hell will be loose. The concept of a French-German, or German-French, “tandem” driving and directing European “integration” has already in the last years of Angela Merkel outlived its usefulness: France won’t be led by Germany, hard-right or soft-left, and Germany will be led by the United States rather than by hard-French France. The EU has long become too diverse internally and too infiltrated by the United States to be more than an extended battlefield for the domestic politics of its individual member states; it will turn into a sub-department of Nato as [the European Commission president] Ursula von der Leyen, which seems likely, succeeds [Nato chief, Jens] Stoltenberg.

GJ: What do you make of the younger generation of German economic thinkers? There are some signs that they are less bound to the old ordoliberal orthodoxies than prior generations, and that some are even actively challenging the old consensus, especially as its dysfunctions – for example, the debt break – become glaringly obvious.

WS: Economists are in the business of selling recipes for economic success. If their old recipes don’t work, they come up with new ones and call this cumulative scientific progress. (If the new recipes don’t work either then “more research is needed”.) Today, under post-austerity, it’s supposed to be fiscal debt rather than fiscal consolidation that will rescue us. But if it didn’t rescue us in the past, why should it now?

Since the end of the 1970s, economic growth kept declining while public indebtedness kept increasing. This was because the gap between the growing overhead costs of capitalism and the declining contribution governments could extract from capital to pay for them had to be covered by borrowing from capital instead of taxing it – because in an increasingly internationalised political economy, if you try to make capital pay for itself it disappears, shy like deer. Borrowing from the rich takes the place of taxing the rich, letting them keep their surplus profits and paying them interest on top of it. For governments this is a gamble on forever-low interest rates and fast economic growth, so they can hope to outgrow their debt in some indeterminate future. If this doesn’t work out, the fiscal crisis of the state will usher in the next financial crisis of the world. Or in short: it’s taxes not credit, stupid.

GJ: What explains the collapse in support for the SPD and what are the lessons for the British Labour Party given Keir Starmer seems to have taken some inspiration from Olaf Scholz?

WS: The collapse of the SPD must be seen in the context of the general collapse of social democracy in most European multi-party systems. Social democracy has not come up with a Fourth Way after the disaster of the Third Way. Voters seeking protection from capitalist creative destruction turn to the new nationalists rather than the old socialists. And those who want more immigration, more military interventions against evil empires of all sorts, and lower carbon emissions can always vote Green.

I regret to have to say that I find it hard to believe that Olaf Scholz should have “inspired” anyone – on what? The way things look, his party may seek refuge after the next federal election in a coalition as junior partner of a more or less victorious CDU, like it interestingly did after the two state elections of 2023 in Berlin and Hesse. Of course, that would seal its final demise, although it might allow it a stay of execution until its present leadership reaches the age of retirement. A lesson from Germany for Sir Keir? Respice finem; get ready for the worst.

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