The crisis in democracy and authoritarian neoliberalism after the Eurozone crisis: Fantastic debates and power as affording not to learn from mistakes

TY - CHAP

T1 - The crisis in democracy and authoritarian neoliberalism after the Eurozone crisis

T2 - Fantastic debates and power as affording not to learn from mistakes

AU - Ryner, Magnus

PY - 2018/1/1

Y1 - 2018/1/1

N2 - This chapter asks whether the crisis in Europe today has a dialectical quality. Drawing on ideas from Jürgen Habermas’s classic text, Legitimation Crisis (1975), to characterize the crisis, it posits that the European system lacks the “selfhealing powers that are necessary for a recovery” and that its subjects find themselves, like the dramatis personae in classical tragedy, at the “turning point in a fateful process”. This already challenges the generally benign readings of the progressive, self-reforming nature of the European Union, through which each positive step in European integration is a successful response to a new crisis. It then asks whether they can “summon up the strength to win back their freedom by shattering the mythic power of fate through the formation of new identities” (Habermas, 1975, p. 2). At stake here is the scope for a democratic solution to the triple European crises of financialization, neoliberal austerity, and the democratic deflcit. This involves two sets of issues: first, the ability to diagnose these crises and the current conjuncture, propose organic solutions based on a realistic analysis of the past and present that not only identifies causes; and, second, proposals about feasible reforms as well as the agents or agencies that might deliver them, and indicate how the balance of forces can be reorganized at different sites and scales to deliver these reforms. In short, economic analysis must be combined with political analysis because economic reforms occur within specific political forms and are pursued by specific political agencies. A prima facie case for posing this question is that the loss of self-healing powers signified in the dark clouds of Eurozone crisis seems to contain the silver-lining of a rich pan-European heterodox debate over possible alternative futures. In seeking a dialectical answer to the question above, this chapter draws on Friedrich Engels’s contrast, in Socialism: Utopian and Scientific (1880 [1986], p. 403), between (1) utopian visions based on the elucubrations of great minds in response to moral disquiet about current conditions and (2) a scientific analysis based on a materialist analysis of the emerging contradictions of contemporary capitalism and their role in preparing the ground for its practical transcendence. Engels thereby directs us to consider whether the solutions proposed in the aforementioned debate are merely the more or less refined “phantasies” of “this or that ingenious brain”, that may nonetheless contain “stupendously grand thoughts and germs of thought that… break out through their phantastic covering” but need to be reworked to reveal their transformative potential, or are based on compelling diagnoses of the historical-economic conditions in which the EU and attendant social forces find themselves today. This in turn poses important questions about crises, their construal, the scope for learning from utopian or phantastic diagnoses of the crisis and the corresponding solutions, and the challenges of developing a valid account of the crisis and a correct reading of the potential for transformation in the light of the complexity of the crisis and the balance of forces (on these distinctions, see the introduction by Jessop and Knio). In addressing this question, I examine the respective diagnoses, and the debates within and between, two alternative visions of how to overcome European disciplinary neoliberalism. In broad terms, this heterodox economic debate is one between left-federalists (or as I call them, federalist Kaleckians), who envisage radical reform of EU structures, and left intergovernmentalists who envisage a fundamental break, where the immediate conjuncture entails a return to struggles in the field of the nation state and inter-state relations. Whilst these visions are grounded in economic analysis, they both raise the question of whether the EU can be democratized or, more fundamentally, whether the EU can be seen as an emergent polity with an emergent “demos” that might replace the current economic and political order. Starting with economic analyses has the benefit that this approach adds much-needed content to overly formalist debates about democracy and the EU. I argue that, in different ways, both the federalist Kaleckians and the left intergovernmentalists are utopians in the sense of Engels. The federalist Kaleckians are the most obviously utopian in that their vision presupposes the mobilization of a pan-European agency, which is quite incongruent with the socio-historical conditions of contemporary European capitalism. Their analysis is marked by the functionalist assumption of a close relation between the density of communication channels and agency that does not obtain. However, though on the surface the left intergovernmentalists seem to be more “realistic”, or in Engels’ parlance “scientific-materialist”, they are, if anything, even more “phantastic” in their misreading of the politico-economic and geopolitical structure of world money. The left intergovernmentalists follow rather orthodox Marxist theories of imperialism, originally applied to European integration by Ernest Mandel (1967). They see the Euro representing the interests of amalgamated capitalist groupings under German leadership, rivalling the Dollar. Their “Plan A” is based on recasting the growth model of Germany from export orientation to the strengthening of aggregate demand. Failing this, their “Plan B” advocates an exodus of member states from the Euro. The problem is that Germany does not enjoy the hegemonic contender status that Plan A implies. At the same time, the Euro is not, as Plan B implies, inconsequential for shielding member states from externalities emanating from the Dollar hegemon. Both Plan A and B underestimate the structural constraints of European states acting either in concert or alone in the context of US-led global capitalism. A more accurate reading of the situation concludes with the bad news that Europe is caught in a Weberian iron cage. In other words, a deeply troubled situation from which there is no easy escape despite the disenchanted realization that the Celestial City will never be reached (Baehr, 2001). Such a conclusion follows from Nicos Poulantzas’s prescient analysis (1974) of the emerging relation between America and Europe in global capitalism after the collapse of the Bretton Woods, which he described as one of “interiorization”. Poulantzas agreed with orthodox theories of imperialism that European capitalist groupings would retain autonomy in capitalist competition vis-á-vis American ones. However, they were becoming structurally subordinate as external inter-capitalist relations in the world economy were replaced by internal ones in an integrated world economy, which was being created in the image of the particularities of the American social formation. This was because the US dominated sectors that were strategic not only in international competition but in structuring the transatlantic and global economy. This includes above all the growing significance of US-centred money capital (Panitch and Gindin, 2012). As Europe’s “interior bourgeoisie” became increasingly connected with the American social formation on subordinate terms, it was also progressively alienated from the distinct character of Europe’s social formation, rendering increasingly difficult the task of European states to mediate between imperatives of capital accumulation and social legitimation. The situation in which Europe finds itself after the Eurozone crisis is the apogee of this longer-term development (Cafruny and Ryner, 2007; Ryner and Cafruny, 2017). Neither the federalist Kaleckians nor the left intergovernmentalists offer answers to how this iron cage can be escaped. Instead, the increased difficulties in mediating between capital accumulation and legitimation have rendered governance in the EU increasingly authoritarian. In pursuit of this argument, the first two sections of this chapter review the Kaleckian federalists and left intergovernmentalist positions. The third and final section elaborates on the iron cage situation that Europe finds itself as a result of interiorized and structurally subordinate transnational relations with the US and attendant difficulties in mediating between capital accumulation and societal legitimation. It is argued that the transition from a disciplinary neoliberal governance, characteristic of the Single Market and the EMU before the Eurozone crisis, to an increasingly authoritarian neoliberalism is symptomatic of these difficulties. The federalist Kaleckians.

AB - This chapter asks whether the crisis in Europe today has a dialectical quality. Drawing on ideas from Jürgen Habermas’s classic text, Legitimation Crisis (1975), to characterize the crisis, it posits that the European system lacks the “selfhealing powers that are necessary for a recovery” and that its subjects find themselves, like the dramatis personae in classical tragedy, at the “turning point in a fateful process”. This already challenges the generally benign readings of the progressive, self-reforming nature of the European Union, through which each positive step in European integration is a successful response to a new crisis. It then asks whether they can “summon up the strength to win back their freedom by shattering the mythic power of fate through the formation of new identities” (Habermas, 1975, p. 2). At stake here is the scope for a democratic solution to the triple European crises of financialization, neoliberal austerity, and the democratic deflcit. This involves two sets of issues: first, the ability to diagnose these crises and the current conjuncture, propose organic solutions based on a realistic analysis of the past and present that not only identifies causes; and, second, proposals about feasible reforms as well as the agents or agencies that might deliver them, and indicate how the balance of forces can be reorganized at different sites and scales to deliver these reforms. In short, economic analysis must be combined with political analysis because economic reforms occur within specific political forms and are pursued by specific political agencies. A prima facie case for posing this question is that the loss of self-healing powers signified in the dark clouds of Eurozone crisis seems to contain the silver-lining of a rich pan-European heterodox debate over possible alternative futures. In seeking a dialectical answer to the question above, this chapter draws on Friedrich Engels’s contrast, in Socialism: Utopian and Scientific (1880 [1986], p. 403), between (1) utopian visions based on the elucubrations of great minds in response to moral disquiet about current conditions and (2) a scientific analysis based on a materialist analysis of the emerging contradictions of contemporary capitalism and their role in preparing the ground for its practical transcendence. Engels thereby directs us to consider whether the solutions proposed in the aforementioned debate are merely the more or less refined “phantasies” of “this or that ingenious brain”, that may nonetheless contain “stupendously grand thoughts and germs of thought that… break out through their phantastic covering” but need to be reworked to reveal their transformative potential, or are based on compelling diagnoses of the historical-economic conditions in which the EU and attendant social forces find themselves today. This in turn poses important questions about crises, their construal, the scope for learning from utopian or phantastic diagnoses of the crisis and the corresponding solutions, and the challenges of developing a valid account of the crisis and a correct reading of the potential for transformation in the light of the complexity of the crisis and the balance of forces (on these distinctions, see the introduction by Jessop and Knio). In addressing this question, I examine the respective diagnoses, and the debates within and between, two alternative visions of how to overcome European disciplinary neoliberalism. In broad terms, this heterodox economic debate is one between left-federalists (or as I call them, federalist Kaleckians), who envisage radical reform of EU structures, and left intergovernmentalists who envisage a fundamental break, where the immediate conjuncture entails a return to struggles in the field of the nation state and inter-state relations. Whilst these visions are grounded in economic analysis, they both raise the question of whether the EU can be democratized or, more fundamentally, whether the EU can be seen as an emergent polity with an emergent “demos” that might replace the current economic and political order. Starting with economic analyses has the benefit that this approach adds much-needed content to overly formalist debates about democracy and the EU. I argue that, in different ways, both the federalist Kaleckians and the left intergovernmentalists are utopians in the sense of Engels. The federalist Kaleckians are the most obviously utopian in that their vision presupposes the mobilization of a pan-European agency, which is quite incongruent with the socio-historical conditions of contemporary European capitalism. Their analysis is marked by the functionalist assumption of a close relation between the density of communication channels and agency that does not obtain. However, though on the surface the left intergovernmentalists seem to be more “realistic”, or in Engels’ parlance “scientific-materialist”, they are, if anything, even more “phantastic” in their misreading of the politico-economic and geopolitical structure of world money. The left intergovernmentalists follow rather orthodox Marxist theories of imperialism, originally applied to European integration by Ernest Mandel (1967). They see the Euro representing the interests of amalgamated capitalist groupings under German leadership, rivalling the Dollar. Their “Plan A” is based on recasting the growth model of Germany from export orientation to the strengthening of aggregate demand. Failing this, their “Plan B” advocates an exodus of member states from the Euro. The problem is that Germany does not enjoy the hegemonic contender status that Plan A implies. At the same time, the Euro is not, as Plan B implies, inconsequential for shielding member states from externalities emanating from the Dollar hegemon. Both Plan A and B underestimate the structural constraints of European states acting either in concert or alone in the context of US-led global capitalism. A more accurate reading of the situation concludes with the bad news that Europe is caught in a Weberian iron cage. In other words, a deeply troubled situation from which there is no easy escape despite the disenchanted realization that the Celestial City will never be reached (Baehr, 2001). Such a conclusion follows from Nicos Poulantzas’s prescient analysis (1974) of the emerging relation between America and Europe in global capitalism after the collapse of the Bretton Woods, which he described as one of “interiorization”. Poulantzas agreed with orthodox theories of imperialism that European capitalist groupings would retain autonomy in capitalist competition vis-á-vis American ones. However, they were becoming structurally subordinate as external inter-capitalist relations in the world economy were replaced by internal ones in an integrated world economy, which was being created in the image of the particularities of the American social formation. This was because the US dominated sectors that were strategic not only in international competition but in structuring the transatlantic and global economy. This includes above all the growing significance of US-centred money capital (Panitch and Gindin, 2012). As Europe’s “interior bourgeoisie” became increasingly connected with the American social formation on subordinate terms, it was also progressively alienated from the distinct character of Europe’s social formation, rendering increasingly difficult the task of European states to mediate between imperatives of capital accumulation and social legitimation. The situation in which Europe finds itself after the Eurozone crisis is the apogee of this longer-term development (Cafruny and Ryner, 2007; Ryner and Cafruny, 2017). Neither the federalist Kaleckians nor the left intergovernmentalists offer answers to how this iron cage can be escaped. Instead, the increased difficulties in mediating between capital accumulation and legitimation have rendered governance in the EU increasingly authoritarian. In pursuit of this argument, the first two sections of this chapter review the Kaleckian federalists and left intergovernmentalist positions. The third and final section elaborates on the iron cage situation that Europe finds itself as a result of interiorized and structurally subordinate transnational relations with the US and attendant difficulties in mediating between capital accumulation and societal legitimation. It is argued that the transition from a disciplinary neoliberal governance, characteristic of the Single Market and the EMU before the Eurozone crisis, to an increasingly authoritarian neoliberalism is symptomatic of these difficulties. The federalist Kaleckians.

UR - http://www.scopus.com/inward/record.url?scp=85059199639&partnerID=8YFLogxK

U2 - 10.4324/9781315161587

DO - 10.4324/9781315161587

M3 - Chapter

AN - SCOPUS:85059199639

SN - 9781138062504

SP - 121

EP - 138

BT - The Pedagogy of Economic, Political and Social Crises

PB - Taylor and Francis Ltd.

ER -