In this conversation, sociologist Wolfgang Streeck discusses the history and future of European integration with RevDem editors Laszlo Bruszt and Michal Matlak.
Wolfgang Streeck is a sociologist and the former director of the Max Planck Institute for the Study of Societies in Cologne. His main research interest is in the tension between democratic polity and a capitalist economy. He has published a number of works on this topic including Buying Time: The Delayed Crisis of Democratic Capitalism (2014) and How Will Capitalism End? Essays on a Failing System (2016), Between Globalization and Democracy (2021). He studied Sociology at the Goethe University in Frankfurt and holds a PhD in Sociology from Columbia University. Starting in 1974, he became assistant professor in sociology at the University of Münster, and then acted as professor of sociology and industrial relations at the University of Wisconsin–Madison between 1988 and 1995. Afterwards he joined the Max Planck Institute for the Study of Societies as Director.
Laszlo Bruszt: You were long well-known for your work on the political economy of modern capitalism and on your work on institutional change, but nowadays you’re known for writings about European integration and the European Union. How did your perspective on European integration and the EU change?
Wolfgang Streeck: This story may come as a surprise to many people. In the 1980s, I was an ardent supporter of European integration. Back then, I took part in many meetings with the German metalworkers’ union in Brussels in order to help define what was then called the “social dimension of Europe”, which included strong, influential trade unions at the European level and social policies aimed at alleviating inequalities in our societies. When the second Delors Commission was set up in the early 1990s, it became clear to me that this project had been abandoned.
Laszlo Bruszt: What would be your diagnosis of the current shape of the European Union?
One peculiarity of this construction is that there is no real center. Neither is there a supreme hegemon. There is this very strange alliance between France and Germany, who are fighting between them over the concept of European integration, its finalité. They have different views about this issue, but they know that they cannot be the hegemon of Europe without the help of the other. There are internal fights, but also attempts to find a common position with the other EU countries, which is very difficult.
It is necessary here to introduce the concept of imperial rent into the debate. There is a certain logic to be observed, and a regularity between different imperial constructs. In order to keep an empire together, the center has to invest in its cohesion. This is what I call “imperial costs”. Sometimes you have to fund armies, while in other instances you send economic subsidies. You also have to educate elites from the periphery, so that they go back to the periphery and believe that now they know how to run a modern state. But I think that it is currently more significant that keeping an empire together requires the presence of an imperial rent which is higher than the cost of the empire.
In Germany, the issue is very clear. It is about European Monetary Union. Without the EMU, Germany would not be as rich as it is. While EMU is the source of Germany’s prosperity, However, Germany also has to share the profits from European integration with France.
At the present moment, it is a very real possibility that the costs of empire will increase, while the imperial rent remains constant, or decreases. Countries that lag behind in economic terms, like Italy, require more and more transfers from the center, while the center begins to feel that it can do without these people. This applies especially to imperial centers which are democracies. (Not all imperial centers are democracies. Remember the Soviet Union, for example.)
My forecast for the European Union is that there comes a point at which this imperial deficit will become increasingly apparent, especially in Germany.
Laszlo Bruszt: Papandreou came to exactly the opposite conclusion from the post-2008 management of the monetary crisis. There, from the perspective of the periphery which became very obedient, the calculation was the following: the potential costs of exits are much higher than being obedient and staying. Therefore, they stayed and entered into settlements with Germany or with the Frugal Four that were sometimes humiliating, sometimes just very expensive, but in the end, they were still much lower than the costs of exit.
The periphery adapts to a certain extent to the demands of the center, and then falls into a trap. They cannot get out of it easily. One can observe this in the case of Italy. I think that the euro is a big problem for the Italian economy. The Italian middle class, however, will oppose any attempt to leave the euro, because they have accumulated debt in euros. Usually, I refrain from making predictions, but my half-hearted prediction for the European Union is that it will break apart sooner or later.
My analytical focus is the distinction between the population and the elites. What I call “imperial inter-elite management” consists of the center ensuring that peripheral governments are taking their cues from the center. To take again the example of Italy, the last three or four Italian prime ministers were basically invented in Brussels or Berlin.
Both after 2008 and during the COVID crisis, the European Central Bank and the EU had to play a very complex game. To understand this, one has to keep in mind the division between the citizens of a country and the elites. The German elites, all of them, including the trade unions, believe that the European Monetary Union must be defended to the very end. There must be no break-up of European Monetary Union. The root of the problem is that the center – or, for that matter, the European Commission on behalf of the center – would have to be able to reduce or put an end to the increase in inequalities between the peripheral countries and the center, especially Italy. This does not seem feasible.
Laszlo Bruszt: In your recent Spiegel interview they asked you whether your position is close to Orbán, and then on the other extreme, Adam Tooze in his London Review of Books review, he puts you close as an ideologue of Die Linke. So where would you put yourself in this?
I do not respond to such categorizations. As a social scientist, I try to make sense of what I see. And then, after due effort, I say what I think I see. On this basis, I would like to address the substantive question: should there be countries in the EU which are slowly moving towards authoritarian rule, as is sometimes said about Hungary and Poland? As an observer, I first want to explain why the Union and its hegemonic states cannot end this process. The bargaining power of authoritarian governments on the periphery increases, because they can always say, if you do not invest here, the Chinese will do so instead.
This applies both to Hungary and Poland, although in the case of Poland there is an additional dimension. If you tell the Polish government to be nicer to their judges, they will pick up the phone and call Washington. The United States has never been too strict in its choice of friends when it comes to getting allies on its side. Poland is ready to allow the United States to deploy all sorts of military equipment in their country. This being so, the United States is not too concerned about the independence of the Constitutional Court in Poland. Especially now, during the war and for the time after it, Poland has a strong bargaining position vis-à-vis the center of the EU.
Besides, I make these arguments as a sociologist, and this may be a bit more serious than my personal position. There are societies which hold together thanks to a certain traditionalism. What to do with this? Can such traditionalism be smashed or destroyed from the outside? I don’t know any example where this would be possible, short of, say, total defeat in war.
On the contrary, I think that one awakens enormous resistance by dictating to people from the outside how they should live, what they should do, and what they should believe. People are willing to sacrifice for the right to maintain traditional identifications.
This can be placed in a broader context, the context of the 1990s when global capitalism began to truly globalize. What is capitalism in relation to society? It attacks traditionalist ways of life, in a permanent revolution. Markets are modern alternatives to families, villages, and so on. This process may eventually reach all countries with or without compensation in the form of modern forms of solidarity, like trade unions. But I believe that it cannot be imposed.
Michał Matlak: You pointed out this difference between the first and second Delors Commissions, which is why I wanted to ask you whether you believe that there is still a chance to reform the EU in a more social direction or whether this is absolutely impossible? Is the ‘EU doomed to failure’, as the headline of your interview in Spiegel puts it, or is there a possibility of reforming it if we follow the intentions of Delors or some of his advisers from his first Commission?
That would mean unearthing a project that died 30-40 years ago. Let’s speculate about this. As a social theorist I’m an institutionalist, and it would go against the grain of almost all of the institutions that have been built in Europe after the 1990s.
The Monetary Union is coupled with a free market for goods, services, capital, and labor in a group of countries that are very different in their economic capacity. In addition, there is a clause in the treaties that commits the Union to unlimited mobility of capital, not just inside the Union, but also beyond its borders.
As a result, European economies are completely linked into the global financial sector. They have no control over their finances. Any attempt to impose some sort of capital controls – as I think would be necessary in order to have some local control over the way your economy works – would immediately cause capital flight on a very large scale.
Remember when the European Central Bank cut off the delivery of cash to Greece. People went to the cash machines, only to discover that they were empty. The cash machines were empty because Draghi had told the Greeks, in essence, that they wouldn’t get any cash anymore as long as they had that a particular type of government.
These are just some of the reasons why, in my opinion, we cannot go back in time. An additional problem is where the common resolve of 27 countries comes from. How is it possible to create a movement for the goal of a Social Europe in these so different 27 countries at the same time? In my opinion, it would be the most extraordinary and astonishing event in human history.
Laszlo Bruszt: The dilemma today is how to create a common platform for the citizens of 27 countries. Wouldn’t the creation of transnational parties be one step towards finding a solution to this problem?
The only little problem is that today political parties are firmly nested into national institutions. If you look at Brussels in terms of international or European party structures, it is ridiculous compared to the power, the finance, the legitimacy that parties have at the national level.
Right now, we have a three-party government in Germany. The parties competed over the right to write their preferences into the coalition agreement. There is no homogenization of policy or ideology. You see the writing on the wall. When issues come up, they will, case by case and for the first time, try to reconcile their differences.
I think it is already difficult enough to create parties capable of governing effectively at the national level. One can observe this problem very clearly in the case of France. Macron came out of the blue. He had no ties to parties, and he found it very difficult if not impossible to create a functioning political party.
Let me give you an example to illustrate my point. Before 1990, conservative parties in Europe were heterogeneous coalitions of three constituencies. One was business, the capitalist economy. The other was paternalistic or patriarchal conservatism associated with Catholicism. Christian Democratic parties always combined a labour component with conservatism. And thirdly, there was anti-communism. Until by and large the 1990s, this constellation worked. But then, with more rapid capitalist rationalization in the neoliberal era, it was no longer possible to combine capitalism with the Catholic family. The two things became mutually exclusive, and Communism has in an y case disappeared.
On the left, Social Democracy was an alliance of the traditional working class with an emerging new middle class, better-educated and increasingly working in the service sector, who still knew that they came from the working class and were socially and emotionally connected to it. Now the working class has collapsed into a growing number of precariously employed and a shrinking number of industrial workers, and the new middle class has turned Green and is at odds with the lifestyle of the old working class, their parents. Tell me a formula how in this situation you can organize political parties capable of more than just symbolic-eventist politics?
My interpretation of Merkel is that her politics were entirely driven by polling. And it was superficial, never touching on structural problems. But if you want more than that, how do you build stable political parties?
Michał Matlak: You said that we have two leading states, but at European level, various federal reforms can be carried out that try to balance out the position of the larger and smaller, richer and poorer states. You can think of simple things like changing the power of a country in the Council of the EU. That is why one of the projects balancing bigger and smaller states, the Treaty of Nice, was closer to this federal solution than subsequent treaties.
Do you believe that institutional reforms of this kind are possible and should be carried out? Because you say that, as long as the European Monetary Union is one of the very serious sources of the problem, at the same time you say that it is very difficult now to go back to national currencies. What is the way out of this situation? Is it to go beyond the European level, or should we forget about Europe?
We can approach politics on the basis of a wish list, requesting that the stronger states should give up power in favor of the rest. We can spend a lot of time on this, but it is fruitless. Germany and France not only have the will but also the need to control the rest, because otherwise they will be controlled by them.
Once we understand this, the question is what can actually be done under real conditions? If I may simplify this a little bit, I would say that before you can reform something that is so deeply rooted in the capitalist, neoliberal world, it first must run against the wall.
I hope that European leading figures will at some point learn that it is impossible to maintain the hierarchical structure of the European Union, with a dictator called European Court of Justice, with a European Commission that dictates, as it were, to the peripheral countries what policies to pursue, and with a European Central Bank that is totally unaccountable to anyone. Then, a slow reconstruction of this structure can proceed in the direction of less hierarchical and more egalitarian relations between members.
In short, I hope that Brussels will at some point be remodelled into a platform for cooperation projects that are voluntarily chosen by European countries. Brussels would become the place where expertise and structural support could be obtained to enable, say, Mediterranean countries to come up with ideas for restructuring and revitalising their economies without France and Germany, via Brussels and the European Central Bank, looking into their books.
In the German tradition of state theory in the 1930s, there was a debate between two important theorists of history and politics, Carl Schmitt and Otto Hintze. The latter was a historian who had studied cooperatives, especially in the context of Germany, as distinguished from a capitalist organization of production. Drawing inspiration from Hintze, we could begin to think in terms of structuring the European Union less as an empire and more like a cooperative with voluntary membership. For a while, this was present in the debate as a possibility, called a little disparagingly Europe à la carte. If you now in Brussels mention “Europe à la carte”, they will lock you up in a cell for three days without water and food, because this is a concept that decent “pro-European” people are not supposed to use. It is a dirty word. Why? Because in the 1990s at the latest, it had become clear that in order to have a decent neoliberal economy, it was necessary to have a central state that enforces neoliberalism on the Member States.
There’s one historical example worth remembering in this context. After the Second World War, the Scandinavian countries set up an organization called the Nordic Council. They had no borders between them anymore. You could cross from one country into the other. They maintained their separate social systems. They learned from each other. They were a completely peaceful assembly of sovereign states, cooperating with each other. Can Europe be something like this?
Life is easier if you’re not telling others how to behave and don’t have to pay them for behaving.
Laszlo Bruszt: Is Europe à la carte possible without a polity that allows managing this kind of diversity, and that one would say is a federalist polity of checks and balances?
In my latest book, entitled Between Globalism and Democracy, I argue that a centralized government beyond a certain size will always fail, unless it can use force, or coercion, and even then it may be less than effective. Because highly complex societies are too difficult to be governed by means of a centralized technocracy. Nor are they governable by what one could call a “marketocracy”, a polity where the market governs. Karl Polanyi taught us that people will not accept a marketocracy. You cannot subject your life to the unpredictable forces of the market, and if a government tries to force you, it will meet resistance.
Regulations are needed, but regulations that are designed in Brussels, applying uniformly to both Sweden and Bulgaria, are not a good idea. Concrete projects could be implemented, for example, by a committee of any number of countries interested in trains crossing their borders and in operating trains more efficiently. I think that Brussels could play a good role even in such an arrangement, because there are intelligent people working in the Brussels bureaucracy. Governments could call them up and ask: ‘Listen, we want to do x, y, and z. Could you help us? What kind of contractual agreement do we need? You have the expertise to advise us in these matters, but make sure you understand that we are running the show, because it is our show, not yours.’
Citizens could learn to take responsibility for their own country’s policy again, rather than looking for so-called “European solutions”. This is one of the diseases of German politics. If they do not know how to respond to a problem, they ‘wait for a European solution.’ Perhaps the key to European integration could be that the citizens of the Member States begin to learn that improvements only happen locally, even general improvements, and that we have to make them ourselves, whoever ‘we’ may be. Nobody will deliver us social progress on a silver plate. And this also applies to democracy in countries like Hungary and Poland.
The conversation was recorded on 21.01.2022
The transcript was edited for clarity and length.
In collaboration with Hannah Vos