The image I have of the end of capitalism – an end that I believe is already under way – is one of a social system in chronic disrepair, for reasons of its own and regardless of the absence of a viable alternative. While we cannot know when and how exactly capitalism will disappear and what will succeed it, what matters is that no force is on hand that could be expected to reverse the three downward trends in economic growth, social equality and financial stability and end their mutual reinforcement. In contrast to the 1930s, there is today no political-economic formula on the horizon, Left or Right, that might provide capitalist societies with a coherent new regime of regulation [...]

[...] Geoffrey Hodgson has argued that capitalism can survive only as long as it is not completely capitalist – as it has not yet rid itself, or the society in which it resides, of ‘necessary impurities’. Seen this way, capitalism’s defeat of its opposition may actually have been a Pyrrhic victory, freeing it from countervailing powers which, while sometimes inconvenient, had in fact supported it. Could it be that victorious capitalism has become its own worst enemy?

[...] consumption in mature capitalist societies has long become dissociated from material need. The lion’s share of consumption expenditure today – and a rapidly growing one – is spent not on the use value of goods, but on their symbolic value, their aura or halo. This is why industry practitioners find themselves paying more than ever for marketing, including not just advertising but also product design and innovation. Nevertheless, in spite of the growing sophistication of sales promotion, the intangibles of culture make commercial success difficult to predict – certainly more so than in an era when growth could be achieved by gradually supplying all households in a country with a washing machine.

[...] there is no indication that the long-term trend towards greater economic inequality will be broken any time soon, or indeed ever. Inequality depresses growth, for Keynesian and other reasons. But the easy money currently provided by central banks to restore growth – easy for capital but not, of course, for labour – further adds to inequality, by blowing up the financial sector and inviting speculative rather than productive investment. Redistribution to the top thus becomes oligarchic: rather than serving a collective interest in economic progress, as promised by neoclassical economics, it turns into extraction of resources from increasingly impoverished, declining societies [...]

[...] What may be surfacing here is the fundamental tension described by Marx between, on the one hand, the increasingly social nature of production in an advanced economy and society, and private ownership of the means of production on the other. As productivity growth requires more public provision, it tends to become incompatible with private accumulation of profits, forcing capitalist elites to choose between the two. The result is what we are seeing already today: economic stagnation combined with oligarchic redistribution.

In subsequent years governments all over the Western world faced the question of how to make trade unions moderate their members’ wage demands without having to rescind the Keynesian promise of full employment. In countries where the institutional structure of the collective-bargaining system was not conducive to the negotiation of tripartite ‘social pacts’, most governments remained convinced throughout the 1970s that allowing unemployment to rise in order to contain real wage increases was too risky for their own survival, if not for the stability of capitalist democracy as such. Their only way out was an accommodating monetary policy which, while allowing free collective bargaining and full employment to continue to coexist, did so at the expense of raising the rate of inflation to levels that accelerated over time.

By 1971 there were clear signs that the – in hindsight, idyllic – world of post-war Fordism was coming to an end. As workers began to rebel, demanding an increasing share of profits after two decades of uninterrupted growth and full employment, customers were also becoming more difficult. Throughout the West, markets for mass-produced, standardized consumer durables were showing signs of saturation. Basic needs had by and large been covered; if the washing machine was still washing, why buy a new one? Replacement purchases, however, could not sustain comparable rates of growth. The emerging crisis manifested itself most visibly among the prototypical mass producers of the Fordist age, the automobile industry, whose manufacturing capacity had grown inordinately, but which now found itself squeezed between increasing worker resistance to its Taylorist factory regime and growing consumer indifference to its mass-market product regime. [...]

Budget balancing, if achieved by spending cuts rather than tax increases, and even more so if accompanied by tax cuts, comes at the expense of discretionary as distinguished from mandatory spending. As public budgets approach a balance, a growing share of government expenditure goes to cover comparatively rigid, legally fixed expenditures, such as wages for public sector workers, public pensions and, of course, debt service. As the latter is sacrosanct in a consolidation state, it is public investment, both in the physical infrastructure and in education, families, active labour market policy and the like – what has been called ‘soft’ or ‘social’ investment – that must give. Over a longer term, this will produce pressures also on ‘entitlements’ like social security, making them more politically vulnerable and less mandatory in effect. Complaints about old commitments suffocating spending for the future and strangling ‘fiscal democracy’ by denying governments political discretion may also result in less generous benefits for subsequent generations, while the benefits of existing claimants are frozen under so-called ‘grandfather clauses’. This is likely further to delegitimize social policies.

[...] While other central banks are embedded in a state with coextensive jurisdiction and have to face a government and a public at the same territorial and political level, the currency and the common market the ECB runs are stateless (as is, essentially, the legal system governed by the ECJ). This makes the ECB the most independent central bank in the world, and its monetary regime the most depoliticized. Unlike Keynesian money, the euro is nothing but a means of exchange and a store of value; it is in particular not suitable for democratic market correction, for example in pursuit of full employment. European money, as conceived in the treaties that created it, is Austrian, ordoliberal and neoliberal money.

[...] Habermas’s partial incorporation of systems theory – the recognition of a technocratic claim to dominance over certain sectors of society, analogous to relativity theory conceding a limited applicability to classical mechanics – depoliticizes the economic, narrowing it down to a unidimensional emphasis on efficiency, as the price for smuggling a space for politicization into a post-materialist theory of ‘modernity’. The fundamental insight of political economy is forgotten: that the natural laws of the economy, which appear to exist by virtue of their own efficiency, are in reality nothing but projections of social-power relations which present themselves ideologically as technical necessities. The consequence is that it ceases to be understood as a capitalist economy and becomes ‘the economy’, pure and simple, while the social struggle against capitalism is replaced by a political and juridical struggle for democracy [...]