Immanuel Wallerstein - Does Capitalism Have a Future?

Coming decades will deliver surprising shocks and huge challenges. Some of them will look new and some quite old. Many will bring unprecedented political dilemmas and difficult choices. This may well begin to happen soon and will certainly shape the adult lives of those who are young at present. But that, we contend, is not necessarily or only bad. Opportunities to do things differently from past generations will also be arising in the decades ahead. In this book we explore and debate, on the basis of our sociological knowledge of world history, what those challenges and opportunities will most likely be. At bottom, most troubling is that with the end of the Cold War almost three decades ago it has become unfashionable—even embarrassing—to discuss possible world futures and especially the prospects of capitalism.

Our quintet gathered to write this unusual book because something big looms on the horizon: a structural crisis much bigger than the recent Great Recession, which might in retrospect seem only a prologue to a period of deeper troubles and transformations. Immanuel Wallerstein explains the rationale for predicting the breakdown of the capitalist system. Over the next three or four decades capitalists of the world, overcrowding the global markets and hard pressed on all sides by the social and ecological costs of doing business, may find it simply impossible to make their usual investment decisions. In the last five centuries capitalism has been the cosmopolitan and explicitly hierarchical world-market economy where the elite operators, favorably located at its geographical core, were in a position to reap large and reasonably secure profits. But, Wallerstein argues, this historical situation, however dynamic, will ultimately reach its systemic limitations, as do all historical systems. In this hypothesis, capitalism would end in the frustration of capitalists themselves.

Randall Collins focuses on a more specific mechanism challenging the future of capitalism: the political and social repercussions of as many as two-thirds of the educated middle classes, both in the West and globally, becoming structurally unemployed because their jobs are displaced by new information technology. Economic commentators recently discovered the downsizing of the middle class, but they tend to leave the matter with a vague call for policy solutions. Collins systematically considers the five escapes that in the past have saved capitalism from the social costs of its drive for technological innovation. None of the known escapes appears strong enough to compensate for the technological displacement of service and administrative jobs. Nineteenth- and twentieth- century capitalism mechanized manual labor but compensated with the growth of middle- class positions. Now the twenty-first century trajectory of high-tech is to push the middle class into redundancy. This leads us to another hypothesis: Might capitalism end because it loses its political and social cushion of the middle class?

Craig Calhoun argues to the contrary that a reformed capitalism might be saved. Calhoun elaborates on the point, recognized by all of us, that capitalism is not merely a market economy, but a political economy. Its institutional framework is shaped by political choice. Structural contradictions may be inherent in the operation of complex markets but it is in the realms of politics that they may be remedied, or left to go unchecked to destruction. Put differently, either a sufficiently enlightened faction of capitalists will face their systemic costs and responsibilities, or they will continue to behave as careless free riders, which they have been able to do since the waning of liberal/left challenges a generation ago. Just how radical will be the shift from contemporary capitalism to a revamped future system is an open question. A centralized socialist economy is one possibility, but Chinese-style state capitalism may be even more likely. Markets can exist in the future even while specifically capitalist modes of property and finance have declined. Capitalism may survive but lose some of its ability to drive global economic integration.

Michael Mann favors a social democratic solution for the problems of capitalism, but he also highlights even deeper problems that arise from the multicausal sources of power. Besides capitalism, these include politics, military geopolitics, ideology, and the multiplicity of world regions. Such complexity, in Mann’s view, renders the future of capitalism unpredictable. The overriding threat, which is entirely predictable, is the ecological crisis that will grow throughout the twenty-first century. This could likely spill over into struggles over water and food, and result in pollution and massive population migrations, thus raising the prospect of totalitarian reactions and even warfare using nuclear weapons. Mann connects this to the central concern of this book: the future of capitalism. In Mann’s analysis, the crisis of climate change is so hard to stop because it derives from all of today’s dominant institutions gone global—capitalism as unbridled pursuit of profit, autonomous nation-states insisting on their sovereignty, and individual consumer rights legitimating both modern states and markets. Solving the ecological crisis thus will have to involve a major change in the institutional conditions of today’s life.

All these are structural projections akin to “stress tests” in civil engineering or, as we have all now heard, in banking. None of us bases our prognoses of capitalism in terms of condemnation or praise. We have our own moral and political convictions. But as historical sociologists, we recognize that the fortunes of human societies, at least in the last ten thousand years beyond the elementary level of hunter-gatherer bands, have not turned on how much good or evil they produced. Our debate is not whether capitalism is better or worse than any hitherto existing society. The question is: Does it have a future?

This question echoes an old prediction. The expectation of capitalism’s collapse was central to the official ideology of the Soviet Union that itself collapsed. Yet does this fact ensure the prospects of capitalism? Georgi Derluguian shows the actual place of the Soviet experiment in the larger picture of world geopolitics, which in the end caused its self-destruction. He also explains how China avoided the collapse of communism while becoming the latest miracle of capitalist growth. Communism was not a viable alternative to capitalism. Yet the way in which the Soviet bloc suddenly ended after 1989 in broad mobilizations from below and blinding panic among the elites may suggest something important about the political future of capitalism.

Doomsday scenarios are not what this book is about. Unlike business and security experts projecting short-run futures by changing the variables in existing set-ups, we consider specific scenarios futile. Events are too contingent and unpredictable because they turn on multiple human wills and shifting circumstances. Only the deeper structural dynamics are roughly calculable. Two of us, the same Collins and Wallerstein who now see no escape for capitalism, already in the 1970s predicted the end of Soviet communism. But nobody could predict either the date or the fact that it would be the former members of the Central Committee irrationally tearing apart their erstwhile industrial and superpower positions. This outcome was unpredictable because it did not have to happen that way.