[Marxism] Wallerstein interview

[Louis Proyect <lnp3@xxxxxxxxx>]

Capitalism's Demise?
Immanuel Wallerstein interviewed by Jae-Jung Suh

The financial crisis sweeping the world has led many to reconsider the 
neoliberal premises of the U.S. government. Jae-Jung Suh sits down with 
  sociologist and world systems theorist Immanuel Wallerstein to 
consider the paradigm shift in global thinking on economic policy and 
the future of capitalism.

Crisis? What Crisis?

Suh: These days, everybody is talking about a crisis. But everyone has a 
different definition of crisis. Some talk about a financial crisis, 
others about a more general economic crisis, including production. Still 
others talk about a crisis of neoliberalism, a crisis of American 
hegemony, and, of course, some talk about a crisis of capitalism. I 
would like to start by asking how you define the current crisis.

Wallerstein: First, I think the word crisis is used very loosely. As 
most people use it, it simply means a situation in which some curve is 
going down that had been going up. And they call that a crisis. I don’t 
use the term that way. But, in fact, I think we are in a crisis and a 
crisis is a very rare thing.

We have to separate a number of elements here. If you take the world 
since 1945, we had a situation for about 25 years in which the United 
States was the unquestioned hegemonic power in the world system and it 
was also true that it was a period of enormous economic expansion. It 
was, in fact, the single biggest economic expansion in the history of 
the world economy. The French like to call it the “Thirty Glorious Years.”

Kondratieff Cycles

Both came to an end roughly at about the same time, circa 1970, although 
it’s very hard to date these things. I think U.S. hegemony has been in 
decline ever since that time. I analyze these things in terms of what 
are called Kondratieff (Kondratiev) phases, and we entered a Kondratieff 
B phase at about that time. The world economy has been in relative 
stagnation for 30 years. Typical characteristics of a stagnation include 
the fact that what were largely monopolized industries that have earned 
enormous profits no longer do so because others have entered the markets 
efficiently at that point, and so the profit levels of the most 
profitable industries basically collapse.

One rendering of U.S. Kondratieff Cycles in the 19th-20th century

There are two things that can be done about that. One is to move the 
industries to areas of historically lower wages. Why you don’t do that 
earlier is that doing so involves a loss -- a loss in transaction costs. 
I have this crisis of profits. Korea develops as so many other countries 
develop. They take up the less profitable industries and become the 
locus of them.

The second thing that happens when you have a Kondratieff B phase is 
that people who want to make a lot of money shift to the financial 
sphere; basically, speculation through debt mechanisms of various kinds. 
I see this from the point of view of the powerful economic players circa 
the 1970s, the United States, Western Europe and Japan. I call it 
exporting unemployment. Since there is a relative amount of unemployment 
in the world system as a result of the decline of industrial production, 
the question is: Who is going to suffer? So each tries to export the 
unemployment to the other. And my analysis is that in the 1970s Europe 
did well, and in the 1980s Japan did well, and in the beginning of the 
1990s the United States did well. Basically, by various mechanisms -- I 
don’t want to go into the details of the analysis of how they did it -- 
but financial speculation always leads to a bust. It’s been doing that 
for 500 years, why should it stop now? It comes at the end of a 
Kondratieff B phase. Here we are. So what the people are calling a 
financial crisis is simply the bust. This recent business of Bernard 
Madoff and his incredible Ponzi scheme is just the most perfect example 
of the impossibility of continuing to make profits off financial 
speculation. At some point, it goes. If you want to call it a financial 
crisis, be my guest. That’s not important.

full: http://japanfocus.org/_I_Wallerstein__JJ_Suh-Capitalism_s_Demise_

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