Not Even Germans Understand the German Model – So How Are Serbs Supposed To? - An Interview with Wolfgang Streeck

The death of capitalism has been forecast and even declared many times throughout history. However, when explained by someone like professor Wolfgang Streeck, one of Europe’s most influential sociologists and political economists, emeritus director of the Max Planck Institute for the Study of Societies in Cologne, member of the Berlin-Brandenburg Academy of Sciences and Humanities, corresponding fellow of the British Academy starting this year, lecturer at the Universities of Frankfurt, New York, Münster, Florence, and Bologne - capitalism’s dying breath seems more imminent.

According to Streeck, since the financial crash of 2008, neither capitalism’s proponents nor the free market have been able to lead the world into recovery. Decades of economic slowdown and ever weaker growth, along with increasing national debt and social inequality are additional reasons to approach capitalism as an historical phenomenon that can come to an end. It has already buried its opposition, and the same goes for any internal mechanisms that could regulate it. There is nothing left for it to subsume and wear down – socialism, for example, or strong trade unions. Economic growth will be absent, but the reflex to increase profits will remain. This divergence will produce a series of social rows that will be the nails in capitalism’s coffin. Streeck expounded on his ideas at the Institute for Philosophy and Social Theory, supported by the Heinrich Böll Foundation. In doing so, Streeck countered the claim often triumphantly repeated by Serbian Prime Minister Aleksandar Vučić – that we must follow the “German model” blindly (or at least blindfolded), whatever that means and entails.

“Those who think it is necessary or sufficient to simply do what the most successful country is doing are mistaken. It is more effective to adapt economic policy to local ideas about morality, social mechanisms, culture, and the resources available to a particular society. Former Italian Prime Minister Mario Monti wanted to make Italians better Germans than Germans themselves, and he failed because the Italian economy has always grown in times of increased spending; France has grown on the basis of budget deficits… That means they didn’t rely on the market, instead resorting to devaluation of their respective national currencies. It should not be forgotten that, until recently, the German economy was considered backward for its refusal to develop the service sector. Today, Germany’s economy is the strongest because it is export-based, which is why the existence of the Euro suits it most – or perhaps it is the only country the Euro suits completely” said Streeck in an exclusive interview for NIN.

Is it even possible to revive one country’s economy by copying another’s model?

It is, but it would entail a long process of changing the social fabric – habits, existing infrastructure, the education system…However, one economic model is supplanted by another as the most successful quite often, faster than a country can fully implement someone else’s model. In that case, societal movement becomes like shooting at a moving target. In the eighties, everyone wanted to produce cars like the Japanese, while the Japanese themselves were developing different technologies. It is impossible to adapt to the German model without the traditionally German small and medium entrepreneurship. You know, in sociology, people study a single country their whole life to be able to understand it. Merely visiting some factory abroad is not enough to even implement various ways of doing business, let alone to understand someone’s mentality, assuming such a thing even exists. That includes Germany as well. Most Germans don’t understand Germany, there are conflicting opinions - so how could someone who signed some contract understand?

What options are available to countries not suited by the dominant economic model? For example, the Balkan countries?

The political class is always content with not having to find their own solutions. The same is true for the Balkans. If a particular model fails – it’s the people’s fault, it’s the Troika’s fault. It’s never their fault. Responsibility is quite a mobile category for them. That is where the option for all societies lies, including the Balkans’ – to take responsibility, to push the elites up against a wall and always hold them to account. At the same time, decision-making cannot be left to political elites or a handful of individuals alone. Democracy is won, masses are activated, debates are started, nothing happens on its own. What is special about the Balkans, as far as I can see, is that small interest groups have survived throughout history, which makes the region fertile ground for clientelism. A society must decide for itself whether it wants corruption, but that doesn’t happen overnight, and it doesn’t happen through moralizing. It is done by realizing needs, winning responsibility and bottom-up democracy.

Do you think the idea of a nation-state is outdated? What would be an alternative to the nation-state – subnational, regional, supranational political organization?

Lower levels – the subnational or regional, are not sustainable. South and North Italy or East and West Germany are regions with very tense relationships in every sense. Maybe they are represented by the same national football team, but everything else is dividing them. These divisions will only grow over time. Higher levels like the EU could never exist as a state. Europe as a continent is too diverse in a demographic, political, and customary sense for a common legal system to be able to survive and be successfully implemented everywhere.  Weaker regions will keep paying the biggest price, as is the case now, because their voice will not be loud or important enough to be heard. Finally, nation-states, as compromised as they are, have a common judicial, economic, and legal framework, and I can see no better system.

You have said that the way we see capitalism is increasingly changing – for example, in Italy, it’s no longer about the exploitation of the workers by the capitalists, it’s the exploitation of the Mediterranean by Germany. How do we avoid this sort of essentialization present in right-wing populism?

I am working on it, believe me. We are living in a very exciting period in which something we used to take for granted – capitalism and the EU, for example, is dissolving and disappearing. It is important to remind people that the game is not played between nations, but between classes, because capitalism is not nationally determined, it is always ultimately about increasing profits for the capitalists.

Wherever they come from…How do you interpret Brexit in the context of the impossibility of forming a European, British, or some third identity?

People are increasingly distrustful of the political class and the elites who are running the country. It doesn’t matter whether you are a Labourite or Conservative, Social-Democrat or Liberal. This is a natural consequence of the neoliberal trend which has lasted for the past few decades, and which produces mostly political crises. So-called populist parties have entered the democratic arena after a long time of not reaching the vote threshold, but that’s because the democratic arena has been discredited. It is also important to note that capital travels faster than labour. A person will spend their entire life in their small town, while the money meant for their town will go to another country in the form of an investment. They will then become dissatisfied, and on top of that, they will have to compete with an immigrant who is willing to do more for less money. That was the case with Britain – the Blair government opened the doors to cheap labour from Eastern Europe in 2004. After 750.000 people came to Britain, the local population became even more embittered. It is no wonder that they didn’t see this opening as an act of solidarity, but as punishment for not having been a more subservient labour force who would precisely do more for less. That is why, ultimately, the Left must be built from the bottom up, inside nation-states and taking into account local conditions – so that this moving of goalposts where nobody is happy but the political economic elites is avoided.

Do you consider the DiEM25 movement led by Yanis Varoufakis to be a possible solution? Is there room for maneuver to network the European Left?  

There is room, but not in the way DiEM25 is doing it, because it doesn’t question the so-called European idea where large countries have to help the small. A country cannot be sovereign and independent if it has to rely on someone else’s goodwill and problematic intentions. In the current EU, funds are always received in exchange for political and economic control. Even within nation-states as the building blocks of a union such as the EU, there are few examples that an underdeveloped region becomes rich or modernized through the Capital’s decision. There are so few of these cases that they constitute exceptions, not a rule.