The climate crisis can't be solved with today's emergency state of capitalism
Can the climate crisis be solved with the neoliberal, globalist status quo? Is it better to grow the international consensus, or national democracies? A commentary on Wolfgang Streeck's new book.
(Note: the following commentary essay is very far from my usual writing on media. I would like to expand to broader categories of thought to put part of my education and personal curiosities to use on my personal blog. This one is long and contains a decent amount of sociological and political theory. Nonetheless, I hope you enjoy it!)
Wolfgang Streeck, pronounced like “cake,” states the thesis of his new Verso translation, Taking Back Control? States and State Systems after Globalism,” in the first sentence:
In this book I explore the conditions of a possible, although not very probable, revival of democracy as a counterforce to both capitalism and authoritarian rule, in a historical moment when neoliberal globalisation is breaking up to give way to a new, as-yet-unknown political-economic formation.
While I’m partially sympathetic to the anti-neoliberalism/globalism argument in favor of a nation-based democracy, my concern, which I’ll comment on in this essay, is how that relates to climate policy, which Streeck uses as a small example.
To begin with a brief overview, Streeck finds three reasons why global neoliberalism—defined by Hayek/von Mises as the “fight against the tendency of nation-states to intervene politically into the liberal capitalist market economy, which was founded on private property and was regarded as essentially international”—ended in disaster:
It failed to repair the breakdown of postwar Keynesian economics, which resulted in solutions turning into new problems.
It transformed democratic institutions and practices that cut off institutional channels for local demands for political intervention—i.e., capitalist economy moved away from democratic politics.
It eliminated national sovereignty for the sake of international unity.
Streeck, in spirit with, but as the flipside to, Slavoj Žižek’s conclusions on how to fix the world, argues that “today’s capitalism finds itself attacked by three horsemen of the apocalypse,” with one being climate change. And while that “may, at first glance, seem exogenous to capitalism, [it] might as well be considered [a] by-product of the normal course of capitalist development: of its relentless penetration into nature and its violent transformation of social life and social structures on a global scale.”
In short, there are two ways out of the current dilemma: from the top through more supranational authority, and from the bottom through enhanced democratic nation-states. Streeck sees no progress/hope in furthering the status quo former.
The Emergency State (aka all ends have beginnings)
The emergency state, as Streeck categorizes, is a stabilization, by any means necessary, of the previous “central bank state” that existed between 2008 and 2020. The asset-price inflation of the previous state led to more debt and inequality, which then led to an emergency after covid-governments created massive, out of control piles of public debt.
The problem is that there’s no way out. Higher public debt leads to political instabilities that make change impossible. It’s a Gramscian interregnum: “in which the old is dying, but the new cannot yet be born.”
What does that mean for climate change, which can have solutions based in capitalism similar to New Deal public works programs?
There is also growth potential, and much more of it, in the huge efforts now finally overdue at mitigation of the effects of climate change, from urban renewal to dike building to reforestation. But this must be paid out of public budgets, and, as things stand, it can be financed only by debt, tax increases being politically impossible and technically unenforceable. New debt, however, would add to the old debt, the servicing of which is becoming more expensive due to the higher interest rates, testing the limits of public borrowing as set by the confidence, or lack thereof, of private capital. In any case, high interest, inflation, and interrupted supply lines add to the cost of infrastructural investment, increasing the amount of public money needed. Private-investor confidence is also required for the greening of energy generation, away from coal and imported oil and gas towards renewables and nuclear; here, too, public subsidies may be needed, and certainly reliable assurances of political resolve that cannot easily be given, not just because of fiscal constraints but also because of the unpredictability of political support.
We see that unpredictably most nakedly in the USA, global neoliberal hegemony, which changes its climate-change-mind every four years (as we just witnessed very recently). This interregnum was also apparent at COP29, where the Global North passed the buck onto private finance for funding sustainable development in nations they were happy to colonize for resources to quickly industrialize and become global leaders not long ago, which they continue to do today in a different name.
Nonetheless,
it would seem that the restructuring of social and economic life in response to the climate crisis would entail major opportunities for economic growth and prosperity, much like reconstruction after the Second World War. For this, however, a large-scale redeployment of capital and labour would be needed, moving production factors out of old economic sectors into new ones, a scenario in which the fiscal capacities of the states and the monetary capacities of the central banks would appear to be already at their limits. Also, the long years of neoliberalism have shrunk the planning capacities of governments at all levels, for the benefit of the private sector, at the expense of citizens’ loss of confidence in the technical competence of public bureaucracies. Rather than support for a collective effort, with an equitable distribution of the burden, one can more likely expect local outbreaks of discontent, similar to the COVID crisis but dragged out over a long period of social and economic transformation when the purpose of the exercise may recede from sight while the necessary public means will be hitting their limits. Will there be a post-neoliberal state system able to project not just the appearance but also the reality of technical competence combined with social justice, demonstrated by successfully reining in opportunistic attempts by capital to let the costs of ecological restructuring be paid by society alone?
Europe, in the form of the EU, is the prime example of a superstate devoted to collective action against the climate crisis. It has sustainability requirements for the private sector, national movements with popular green policy mandates, and money. But this too, according to Streeck, is becoming too unwieldy/girthy an entity to do anything with all that:
The reinterpretation of ‘Europe’ as a place without qualities but of desire makes it possible to demand a ‘European solution’ for any arising problem, shifting responsibility upwards to the European marketocracy and technocracy whenever those responsible in national politics cannot, or will not, exercise it themselves: ‘Europe’ as a solutionist’s solution for everything – from economic growth to public finance, from migration to internal and external security, from the financial crisis to the climate and COVID crises. In practice, in the uniquely impenetrable European multilevel institutional undergrowth, shrewd politicians operating at the interface between national and supranational politics have learned to move between doing nothing at the national level in the name of ‘European integration’; blaming ‘Europe’ for the failure of national policies; or presenting to their national constituents the policies they favour as prescribed by ‘Europe’, thus immunising themselves against democratic resistance at home.
This is seen notably in places like the UK and Hungary, where politicians rally against the EU for handicapping their policies. Regarding the climate, national governments in Europe have offloaded their climate strategies onto the EU. As a gesture for electioneering gain, German Chancellor Olaf Scholz wrote a letter to European Commission President Ursula von der Leyen urging the bloc to delay the CSRD (corporate sustainability reporting directive, which has disclosure requirements for climate change) to appease German companies and conservative voters. Not even Germany, de facto EU leader, can take back control of what their companies can and cannot do.
But isn’t international solidarity good and something that can uniquely handle the climate crisis, as the environment is spread everywhere evenly? Answer: international (social) solidarity, as is, is entirely illusory, constructed via multinational conglomerates and supranational political authorities working to constantly expand neoliberal globalism. National politicians don’t have the resources (financial and social capital) to effectuate the change needed.
In Streeck’s conception of a polycentric nation-based order, as opposed to our currently neoliberal imperial order, no superpower can act as the “world’s moral guardian and police officer.” In this polycentric “system of dispersed democratic sovereignty, international solidarity is first and foremost anchored in the democratic politics of the nation states, where it must prevail democratically and by which it must be supported.” This appears to be the direction many of the popular movements in Europe are headed, which faces resistance from above.
The position of Americans on climate is well-known yet requires a further moral beatdown:
Moreover, as in climate policy, foreign policy concessions made by a state and rejected by its civil society usually have no effect anyway. Thus, US approval, under Obama, of the resolutions of the Paris climate conference had no impact within the country because it had neither a popular nor an electoral basis. This was, in turn, linked to the failure of the government at the time to make any political investment in its nation’s climate-political collective consciousness. A political class that cannot or will not convince its society that anthropogenic climate change exists – but can convince it of the existence of weapons of mass destruction in Saddam Hussein’s Iraq, or of the need to finance further Israeli settlements in the occupied West Bank – cannot present any convincing arguments in favour of global governance and its own leading role in it, or against an international order based on solidarity and organised democratically from below around the nation-state.
This is most obvious in contemporary American society mired in clickbaity social controversies and Trump’s bombasity, which has real effects but is all highly manufactured to distract civil society from problems like inequality.
A solution? The Keynes-Polanyi state
If the problem is the so-called neoliberal imperial order (née “liberal international order”), then Streeck’s solution is the polycentric nation-based order in the form of the Keynes-Polanyi state. These states would consist of institutions and relations that provide it with a high degree of autonomy, via democracy, safe from the borderless capitalist market and other states. This state would be open to cooperation with others but remains firmly at a distance to preserve the freedom of its citizens to exercise state sovereignty. And finally, this state is prepared to sacrifice economic values to protect non-economic ones and retain social stability.
One of the areas in which this Keynes-Polanyi state must prove itself:
A retreat from hyperglobalisation means a shift of economic policy towards internal growth: domestic production for domestic consumers. Here, too, it is possible to build on trends now long underway, such as the growth of the service sector – particularly the rise of personal services, but public services as well – and an increasing inclination on the part of consumers to prefer regional products, and not just regarding food. The fight against climate change, too, if it is to amount to more than mere conference rhetoric, takes place locally above all, and it requires largely local investment, for example in the insulation of houses, conversion to renewable energy, the creation of a national infrastructure of charging points for electric vehicles, and the development of new, more sustainable methods of building houses and planning urban development.
The other four areas to prove itself are in shortening supply chains, economic patriotism (protectionism), collective goods, and “non-capitalist” capital. In short, these provide a degree of protection at the economic and political levels to insulate a nation’s people against the privations of international markets and top-down supranational authorities; protecting democracy against globalism.
“Democratic Particularism and Global Collective Goods”; so begins Streeck’s section fleshing out the particulars of the Keynes-Polanyi state in terms of climate policy. Global problems don’t need global interstate cooperation in every case. Less is more: the sum of the part is greater than the whole: “a multiplicity of small, independent, democratic and sovereign countries of the Keynes-Polanyi type might prove just as capable as blocs of countries conjoined hierarchically – and could even be superior.”
I would like to illustrate this suggestion with the example of climate policy. In this area, all the hopes of recent decades have been placed in global governance, within the framework of the multilateral and rules-based ‘liberal’ international order, the so-called LIO. But a nearly endless series of international conferences and summit resolutions have achieved virtually nothing; climate change continues unabated. If experience is to be taken into account, it will be necessary at some point to consider the possibility that the problem may have been incorrectly defined. In fact, I would propose as a hypothesis that the established theory and practice of combating climate change both suffer from a commitment to a rational choice model of international state action, whereas a sociological model would be more effective. The latter relies on the mobilisation of collective moral energy at the level of the society to make policies more climate friendly, rather than utility-maximising action at the state level. The main difference between the two approaches is that under the sociological model, the communal production of collective goods takes place without resorting to large, hierarchically ruled state structures. It would function instead in an environment of small, democratic and sovereign national units.
Global collectivism without global cooperation (democratic particularism). While we approach COP30, the ten-year anniversary of Paris, without global emissions reduction taking place, this global governance framework could be pointless; recall the (incorrectly attributed to Einstein) definition of insanity: doing the same thing over and over again and expecting different results. The obvious counter is, why would individual nation-states agree to policies against their economic interests if they can’t trust other states to do the same?
More on the ill-implemented global approach via answering the counterpoint:
Why has the global-governance approach been unable to point the way to an effective solution to the problem of climate change? I suspect that this is due to its close association with a premise that has since the 1960s become a matter of course in Western social theory: cooperative action to secure a collective good requires solving a problem similar to the so-called ‘prisoner’s dilemma’; specific means are needed, but regrettably they are not yet available, or insufficiently available, for inter-state cooperation. The problem consists in this: that every member of a collective who takes part in the collectively rational production of a collective good must reckon with a loss of individual rationality, while members who act in a collectively irrational manner by abstaining from the process gain more as individuals – either as ‘free-riders’ if the collective good is still produced through others’ contributions, or, if that is not the case, because they have at least not sacrificed anything for a lost cause. Since this calculation applies to everyone in the collective, as long as they act independently of each other as rationally calculating individuals – and as individuals they are all too ‘small’ to be able to produce the good privately for themselves and thus as a secondary benefit for others – the collective good cannot materialise. This problem can only be overcome in practice through the establishment of a higher authority that either curtails the autonomy of the participants in their own long-term interest, ordering them to act in a collectively rational manner, or rewards them for their cooperation by offering special benefits to individuals (‘outside inducements’).
Nothing of the kind has happened in the fight against climate change, and there is no indication that the ‘rational irrationality’ predicted by the theory could be corrected either by imperial or superstate global governance, hegemonic self-interest or outside inducements. Even if one does not adhere to rational choice theory, there is something to be said for the idea that states and other formally organised large corporate actors, such as large firms, are ‘rational fools’. But perhaps things might look different with a change of paradigm. In a theory of international relations characterised by the rational choice paradigm, the dominant assumption is that humanity’s global problems, such as climate change, must be solved with the help of rational incentives, positive or negative, by somehow redirecting the individual calculations of participating states towards the collective good. But, as already mentioned, this has so far achieved very little, and one might consider whether the problem lies with the calculations of utility themselves instead of with the incentives, and whether the former are fundamentally unsuitable for solving humanity’s problems. Even the best institutional design cannot create a sufficient quantity of private incentives for individuals. When one then goes on to ask if it is possible to find functional equivalents to such calculations, using a different paradigm from that of rational choice, it makes sense to focus on moral actions and the feelings of duty motivating them. The hypothesis here is that cooperation in the pursuit of collective, universal human interests could only be mobilised to a sufficient extent if one could ensure that it would be carried out in accordance with a moral imperative allowing for no actual choice. That is, it would not really be voluntary in a rational sense; it would, rather, be the result of a collective reassessment, a reversal, which led people to act in a way that was collectively desirable, not because it conferred any direct or indirect individual advantage but for the sake of the cause itself, and because individual identity had been reformed.
Who wants revolution when it needs to happen anyway?
In this situation, what Weber would call ‘value-rationality’ in action, one could not help but cooperate, regardless of what others did – the same others whose actions, under the rational choice paradigm, determine one’s own – and irrespective of what real consequences this has for the aggregated end result of these actions and those of others. A reassessment of this kind can only proceed from real human beings and a specifically human need, awakened (or reawakened) at critical moments, to be morally at peace with oneself and with humanity; it cannot be produced by large bureaucratic state apparatuses dependent on rational calculation.
Q: Why would individual actors in a nation-state want to upend their economic order without trusting others doing the same?
A: They wouldn’t have a choice (pending a cultural revolution).
Cultural revolutions of this kind have been known to take place; they are sparked by social movements that, in moments of collective effervescence – an exuberant feeling of community – spread or revive moral attitudes that, once internalised and identified with, can be betrayed only on pain of self-contempt, for reasons of rational self-interest. Social movements provide societies with ideas about themselves and identities; they run their course at the level of society, not the state, but if they become strong enough, they set objectives for and limits to state action; they produce an emotional normativity, a contagious passion transferable to others, one that is better than anything else at fomenting and stimulating the engagement of the many for a common goal.
It’s amazing how much the language/ideas/history of Communism is simply copy-pasted here onto a democratically-plural world. Also amazing to consider that the way out of current global governance with rational actors acting freely (irrational) is to curtail that freedom on the democratically-sovereign nation-state according to the free will of its civilians.
By contrast, in the rational choice world as projected onto international relations, there are no real people; we see instead artificial, hence emotionless, and therefore amoral, corporative actors, capable at most of moral judgements towards the individuals who are managing them, but all too often incorporated by the apparatus and made compatible with it. The moral action of human beings overrides the paradoxes of rational irrationalism produced by the emotionless world of the apparatus because it is, to a large extent, its own reward and therefore needs no sophisticated incentives. One does not do what one feels to be immoral, irrespective of whether others do it or not – such as eating dead factory-farmed animals, buying and selling slaves, flying by air to a holiday destination, and soon, perhaps, driving a car powered by internal combustion. One does not do this, because ‘it just isn’t done’, at least not by human beings who want to be together with other human beings, after seeing Greta Thunberg on television or listening to a new partner.
Yes, okay, what about climate change?
One example from the field of climate change is the increasing number of cities committed to becoming climate neutral or carbon-free by a certain date. They are aware that their efforts, taken individually, have no impact on a global scale. The impact of their own conscientious actions on global temperatures cannot be demonstrated, but that does not matter to them. Municipal authorities which commit themselves to environmentally virtuous policies are reacting to a growing desire on the part of their residents to live in an environmentally virtuous city. What others do is irrelevant; it is enough to have done the right thing and set an example. Moral renewal through social movements spreads horizontally, not vertically; one can hope that this will happen, but one cannot be certain, as would be necessary in the world of rational choice. But certainty is not a necessity. Local authorities, finding they are obliged to join in, will justify their efforts in the language of rational common sense by referring to the advantages that accrue to the private individual: fewer traffic accidents, cleaner air, less noise, improved public health, more families with children moving in – strictly speaking, however, these are rationalisations of a policy which is desired by its supporters for its own sake: an emotional, sentimental project whose benefits are imagined as extending beyond one’s own lifespan.
Here, the architecture of the state and the politics of scale come into play. There is some evidence that the spread of movements of moral renewal is favoured by a system of dispersed small states. Social movements arise in centres of moral infection, from which they grow laterally. They have more opportunity to gain possession of state power in a system subdivided into small states than when they have to assert themselves immediately throughout the system as a whole. It is appropriate to recall Gibbon here, but also certainly Hayek: in a fragmented state system, the new does not need to prevail immediately everywhere; it is enough if initially it prevails only in one state, even a small one. If it proves to be successful, others who were at first indifferent will adopt it (according to Gibbon, ‘The progress of knowledge and industry is accelerated by the emulation of so many active rivals’); if it turns out to be a failure, the damage remains limited to only one part of the system, and all the other parts will have learned how not to do it.
(Reminds one of the cold war domino theory in practice, when democratic states adopted socialist governments that the USA wrong-headedly thought were being top-down controlled by the Russians or Chinese. Instead of letting a state-system try and fail in this regard, the Americans preferred bombing the hell out of them to atone for their democratic sins.)
A reduction in scale has other effects too. In small states, the population is more homogeneous than in large states, ceteris paribus; new ideas, if they catch on at all, can therefore more easily become the ideas of the majority, with which the whole society identifies, and for the sake of which it hopes to be respected or admired by others. In state systems consisting of small states, rivalries between neighbouring countries can be conducted over moral virtue and cultural prestige, particularly if they belong to a common cultural sphere (as in the successor states of the Western Roman Empire) and can therefore observe each other empathetically. If an associated state is prepared to contribute to the fight against climate change based on ethical convictions or value-rationality, it could be difficult for its neighbours to lag behind. In Gibbon’s words, ‘some sense of honour and justice is introduced into the most defective constitutions by the general manners of the times’. What is today sometimes called virtue signalling can contribute more effectively to raising the overall level of civilisation than ultimately unenforceable decrees issued by a central authority – through a moral race to the top, in contrast to market-driven behaviour, where there is reason to fear a race to the bottom.
It’s hard for anyone, from realists to idealists, to see anything but cynicism in this utopia of homogeneous societies consistently benefiting one another. The successor states of the Western Roman Empire tried genociding one another for over a thousand years until the strong hands of the USA placed a military blanket over the western half of the continent, allowing for welfare-centered social democracies to flourish for a relatively short amount of time. While ethical convictions or value-rationality may be the solution to global climate failures, we would need to get over the use of fossil fuels for quick economic growth.
Also, this horizontal nation-state setup where countries “observe each other empathetically” goes out the window in any crisis. Relating to the climate crisis, a social reorientation was well underway with Fridays for Future but was quickly squashed because of covid. The organization still organizes mass rallies but unfortunately with far less political and international support.
This mechanism can be expected to work most effectively when the states involved are sovereign democracies of the Keynes-Polanyi model. Social movements thrive best in democracies; they flourish in the free spaces a democratic constitution guarantees to its citizens. Freedom of association, assembly, and opinion facilitate cultural rethinking and political innovation. Democracy also underpins citizens’ identification with state and society, and supports their patriotism, which in small states must be based more than anything else on moral excellence – for example when a country (or a city) has voluntarily done something for the good of humanity in adherence to a moral imperative. Patriotism of this kind can do good far beyond the society itself, by setting an example for others. This is comparable, on a larger political scale, with the establishment of carbon-free towns, as mentioned earlier. But without sovereignty, the value of democracy is drastically reduced.
Mind you, this is over 350 pages into a text pregnant with political theory and economic tables. If much of it feels too utopian to be taken seriously, then read the rest. But it does seem like the only way out of the war between conservative reptiles and libtards is through patriotic moral reorientation.
There are many reasons why global problems would be better solved by horizontal diffusion of bottom-up, morally grounded collective and cooperative modes of action in small state structures, than by exerting authority from the top down in a framework of global governance or through an imperial system of superstates. The transmission of moral principles in a system of dispersed states takes place step by step, from the original hotspot and the state in which the new idea is first established, outwards. Dispersed statehood makes it possible to adapt the spread of a moral orientation to different local situations, so that the rationality trap of rational action can be neutralised in a more differentiated, and therefore more effective, manner. The greater readiness of the citizens of small states to feel themselves responsible for their country and its policies is also likely to be helpful. The path from decision to policy enactment will tend to be shorter and clearer in small states, and this should foster a willingness to participate in politics and to assume political responsibility. If smallness is accompanied by relative homogeneity, as is usually the case, civic engagement and a sense of responsibility can also be expected to increase. The miserable results of the system of large states prevailing in human politics should, in any case, be reason enough to try a state system that offers a chance at a grounded, and ultimately, in a generic sense, religiously motivated overcoming of the paradox of rationality.
In a seemingly counter-intuitive way, the path out of the social divide in the USA could be through stronger national/patriotic virtues that make one proud to be an American. And not in the Lee Greenwood, post-9/11 jingoism 2000s Bush year patriotism, but rather the pride in voting for, and enacting of, green measures, which create domestic jobs that reduce emissions and solves the climate crisis.
Who wants to start the revolution?
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