Wolfgang Streeck, Taking Back Control? States and State Systems After Globalism (Verso, 2024)
Robert Hockett, Making Capital Democratic: A Reconstruction of State, Credit, and Finance (Polity, 2025)
I
The sense of an ending has been with us for a half-century now, since it became clear that the promise of the 60s and the possibilities of an anti-colonial imperialism—an international order dedicated to development as against exploitation—were expiring in Southeast Asia. But there was no impending future to be glimpsed in the disintegrating past, because the heir apparent to capitalism was a great deal more of the same.
Socialism became the name of an inchoate desire, then, just news from nowhere, rather than the designation of a mode of production that was emerging from the wreckage of the capitalist past—it was now something to be invented or conjured rather than completed or realized. It had finally become an “ought” with no purchase on the “is,” an ethical principle detached from any historical circumstance, except in the rarefied academic cloisters where the phrase “actually existing socialism” meant the USSR.
Until now, that is. The astonishing circumstance of our time is that socialism has become the dominant figure in the normal political discourse of the US, the epicenter of anti-communism, where a protégé of Joe McCarthy’s consigliere now reigns. Its centrality in the policy debates that divide the two parties finally demonstrates that, like capitalism, socialism has no necessary or even predictable political valence—it can be democratic, or authoritarian, the creature of central planning and state command or the centrifugal function of municipal elections and regional alliances.
Or something in between. These policy debates, and of course the future of “sewer socialism” at stake in the New York City mayoral election, make it clear that socialism no longer translates as state ownership of the means of production. But neither is it the name of an inchoate desire anymore. And it wears at least two faces.
On the one hand, socialism wears the scowling, authoritarian face of Donald Trump, who wants the US government to acquire a direct economic stake—a vested interest—in corporations whose products and conduct might have a discernible impact on foreign policy or national security, and in certain lines of business where that impact is so far imperceptible. Not that he’s in favor of indicative planning or industrial policy, or anything that resembles a rational, systematic approach to the problem of economic growth and development; he is simply too ignorant and too greedy to have any interest beyond revenge or personal aggrandizement.
But apart from efforts to de-regulate certain sectors of business (crypto being the prime example) in return for campaign contributions, neither his administration nor his party demonstrates any interest in free enterprise, free markets, or in free and fair interfirm competition—any interest, that is, in what we’re accustomed to associate with the defense and maintenance of capitalism. Quite the contrary, as witness the FTC’s approval of acquisitions and mergers that will consolidate control of legacy and social media alike (Oracle and TikTok, Skydance and CBS/Paramount, Warner Bros./Discovery); or the government’s stake in Nippon, Nvidia, Westinghouse, et al.; or the use of tariffs to promote the “reshoring” of capacity in manufacturing and to punish political enemies (Ontario, the Argentine opposition).
On the other hand, socialism wears the sunny, democratic face of Bernie Sanders, Alexandria Ocasio-Cortez, and Zohran Mamdani. To begin with, they want to reverse the supply-side revolution that, by reducing tax rates on both corporate and individual incomes—and as abetted by a Supreme Court determined to repeal the New Deal—has drained public coffers and disabled government as such. With that reversal accomplished, they can fund Medicare For All, replenish Social Security, subsidize child care for working adults, fulfill the promise of public education, and pay for much-need infrastructure upgrades (particularly the electric grid that powers public transport and the offspring of the internet).
Their programs are uniformly pro-labor, and they call themselves representatives of the working class, but they are not the heralds of class struggle. For theirs is a cross-class constituency—almost every poll conducted since Sanders hit the campaign trail in 2016, including the exit polls from the South Carolina primary that Joe Biden won in 2020, indicates that a majority of Americans want exactly what Bernie, AOC, and Zohran propose as common-sense reforms that, once funded by a return to the tradition of progressive taxation, are well within reach.
So it turns out that John Dewey was right back in 1929, in Individualism Old and New, when he suggested that the new condition of “corporateness” in American life—the “socialized” character of business enterprise, political representation, and everyday life—had made for a new choice. It was not between capitalism and socialism, but instead between a “capitalistic” socialism and a democratic kind, the latter being the kind wherein workers’ self-management at the point of production would accompany and enforce control of the means of production by the majority, in the name of the common good.
Dewey saw, as had Marx before him, that socialism and barbarism was a perfectly plausible, perhaps even predictable consequence of corporate capitalism. The question was not whether socialism, but what kind?
II
It is now a much more practical question, due to the egregious economic condition of the most advanced capitalist nation—where 60% of the American people live paycheck to paycheck and don’t have enough savings to get through a medical emergency, let alone sustain themselves in retirement—and to the broad political appeal of populism, here as elsewhere. The masses have revolted against the ancien regime, and as yet there’s no telling which way they will turn, whether to a “restoration” of the good old days when people knew their place and stuck to it, or to an explicit, replicable experiment with social democracy.
As the title of Wolfgang Streeck’s book suggests, those masses aim to take back control, one way or another. Theirs is a struggle against neoliberalism and globalization, two labels for the same phenomenon, according to Streeck, two sides of the same coin—viz., not the absence of state power in the form of market regulation, nor the eclipse of the nation state, but rather the depoliticization of policy-making at home and abroad, wherever home may have been.
Streeck persuasively argues that by 2008, the old, once-progressive drive to take urgent issues like public health out of politics, to place them beyond the reach of “vested interests,” had devolved into an elitist, indeed anti-democratic agenda that served no interests except that of the globalists themselves. The more or less populist revolts against this regime, which have erupted everywhere in the aftermath of the Great Recession, will, therefore, re-politicize policy-making, one way or another. Their means and ends are still in doubt; their success is not.
Streeck’s argument is derived from three figures who deserve more credit and renewed attention than any other book I know has allowed—John Maynard Keynes, Karl Polanyi, and Dani Rodrick. Keynes, because he presided over the Bretton Woods compromise between national democracy and global free trade, a compromise abrogated by the “Washington Consensus” that followed the collapse of the USSR and the round of trade negotiations that created the WTO (Streeck makes it plain, and not in passing, that Keynes was a social democrat, not a partner in the politics of austerity); Polanyi, because he insisted that social needs and public goods cannot be priced or monetized, in other words that markets, left to themselves, can neither meet such needs nor deliver such goods; and Rodrick, because in books of 1997 and 2011, he was able to synthesize these predecessors and make the democratic case against globalization.
Here’s an example of how Streeck puts Rodrick’s synthesis to work:
“What remains is the choice between the nation-state in a straitjacket imposed ‘from above’ and a nation-state with democracy ‘from below,’ the former with far-reaching globalization, the latter without. Rodrick’s position on this is quite clear: ‘Democracy and national self-determination should trump hyperglobalisation. Democracies have the right to protect their social arrangements, and when this right clashes with the requirements of the global economy, it is the latter that should give way.’ For Rodrick, as for Polanyi before him, the determination of society’s needs, and of the way of life and the basket of goods appropriate to it, can never take place solely through markets and under their pressure to adapt but must also, and primarily, be determined through the medium of democratic and participatory politics.”
Streeck’s book is a kind of summation for the jury which surveys the evidence adduced by all contributions to the globalization debate, including the banalities issued in book form by Thomas Friedman. But the details don’t get lost at this analytical altitude. Instead, the exact, empirical content of neoliberalism is measured, so that those who doubt its existence might assess the damage it has done, and those who have studied its theoretical antecedents can gauge the actual effects of the Mt. Pelerin Society, the Chicago School, the Club for Growth, and the Manhattan Institute.
Accordingly, the fabled independence of central banks, particularly but not only the Fed, becomes a pressing question for rather than an inviolable premise of reform, of “taking back control” from the global elites who have made monetary policy an instrument of austerity since Paul Volcker crushed runaway inflation and Ronald Reagan crushed the vestiges of union power—for Streeck asks who benefits from that supposed independence, and why monetary policy should be exempt from democratic political control.
To American ears, that is a frightening question to be asking just now, as the buffoon-in-chief whines and wheedles and threatens his way toward presidential control of the Fed. Why in the world would anyone put this incoherent, incompetent gasbag in charge of anything? But the money question was a staple of American politics from the early 18th century, when land banks sprouted from unlikely soil throughout the colonies, into the early 20th century, when it was finally removed from normal political discourse—where it belonged, according to the Constitution—and, like public health, made the province of specialized experts with the appropriate education and experience, that is, bankers and professional economists. So the question isn’t a “populist” concession to the know-nothings who refuse expertise in all its forms.
Besides, Streeck understands that democracy at the level of the nation-state is not to be achieved by making economic policy according to majority rule, or by counting votes as if they were registers of consumer demand (“one man, one vote = one vote, one dollar”). Democracy is not a function in a utilitarian calculus; it can’t be bought because it is not the greatest good of the greatest number. Majority rule can in fact be undemocratic, and has in fact been undemocratic—as the history of Jim Crow at both the South and the North attests. “Taking back control” by means of populism, whether that is conceived as a left or a right-wing movement, is, then, a dead end.
III
But the great virtue of Streeck’s book is to remind use of how contingent our economic moment is on political formations and decisions, which are themselves products of social movements convened by big ideas (there is no such thing as a social movement absent ideology). In this sense, it is a reminder of an earlier moment of transition, the one that eventually but not inevitably gave us the mode of production we call capitalism.
It is also a reminder of the so-called transition debate of mid-20th century, which was a way of asking what caused the decline of feudalism and the rise of capitalism—and what might allow for the emergence of socialism. Until very late in the century, it was a significant concern mainly among Marxists who realized that decolonization had suddenly made “socialism in one country” an anachronism. And it turned on the variable impact of a world market on social relations of goods production.
On the one hand, Maurice Dobb, et al., argued that the creation of a world market in the 16th and 17th centuries had very different social and political effects according to the internal articulation of the labor system then in place—in England, for example, rent-paying commoners inherited the earth because the landed nobility had already turned agricultural production over to them, but in Russia the landed nobility imposed a second serfdom on peasants to meet the massive new, and now effective foreign demand for agricultural raw materials like flax and hemp.
On the other, Paul Sweezy, et al., argued that the appearance of this world market had approximately uniform effects wherever it reached, principally the commodification, or as we would now say, the “privatization,” of resources previously held in common. The question the Marxists addressed obliquely in this academic setting was the same one Keynes kept asking directly at Bretton Woods, at exactly the same time: what dosage of socialism is necessary to make democracy and capitalism compatible when free trade on a global scale becomes a normal dimension of everyday life?
Streeck’s book is an updated answer, as it were, to the transition question so conceived. His last chapter, “Small Statism and Its Possibilities” is a primer on how nation-states, or regional compacts in a polycentric (pluralist) world system, might increase their dosage of socialism in the name of democracy once “de-globalization” on the international scene and “de-scaling” on the domestic scene are underway—as they most certainly are under the hammers of Trump’s economic nationalism and of the near-global populist revolt against neoliberalism. The immediate purpose of the ideal “Keynes-Polanyi state” Streeck sketches here is “to regain a capacity for collective action by a reduction in the scale of political communities.” The long-term goal of that capacity is “an escape from the dictatorship of endless private-profit maximization for the self-perpetuating purpose of the endless maximization of the same” (my italics).
This last declaration sounds radical, like something out of the prophetic Marx at his most bombastic. It is not. For the assumption that still guides public policy-making and still shapes the ambitions of individuals in the West—that endless profit maximization is the only conceivable means to shared prosperity through economic growth, and to “success” in life—has become a proposition so manifestly absurd as to be laughable.
IV
Consider the state of banking systems in the advanced capitalist nation-states. You don’t need a Marxist to convince you that there are no remaining rational grounds for private control of bank assets once the public has become the guarantor of bank liabilities, as it has long been through the FDIC and is now more than ever in view of what the Fed and the Treasury have done since 2008 to contain the effects of financial crises induced by a “global savings glut.” The world’s leading authorities on banking will tell you the same thing, that the “financialization” of the real economy means that bankers are just gambling with other people’s money. Our money, that is, the savings, such as they are, of we, the people.
Just ask Angus King, the former director of the Bank of England; or his old friend, Martin Wolf, the Financial Times columnist and editor; or their colleague, Willem Buitter, formerly a director at the Bank of England and an economist at Citibank; or John Lanchester, the writer who covers financial topics at the London Review of Books; or Robert Hockett, the distinguished professor of law and finance at Cornell who has not only worked for the Fed and the IMF, but has also advised Marco Rubio, Elizabeth Warren, Ro Khanna, and Bernie Sanders. When I asked Wolf (in January of 2023) if he shared King’s opinion of what banks actually do, for example, he smiled, nodded, and said, yes, of course, they’re “running a con game.”
In late 2024, Lanchester explained this long con by reference to figures from 2015, when the UK banking sector had assets of roughly $9 trillion:
“Lending to firms and individuals engaged in the production of goods and services—which most people would imagine is the principal business of a bank—amounts to 3 percent of that total. Lending money where it’s needed is what the modern form of finance, for the most part, does not do. What modern finance does, for the most part, is gamble. It speculates on the movement of prices and makes bets on their direction.”
The point that Lanchester makes without quite declaring it, and that I would stress, is this: modern finance is exactly what Marx predicted it would become (in Volume 3 of Capital), the headquarters of a socialized mode of production, from where it has been presiding over the gradual erasure of capitalism from “within the bounds of capitalist production itself.” The transfer of effective claims on property from one social class to another—the economic signature of modern revolution—has already taken place, insofar as taxpayers (residents, not just citizens) have assumed the fiduciary obligations of the financial system by insuring, indeed guaranteeing, the liquidity of all banking institutions, including the ghostly inhabitants of “shadow banking.”
The completion of this revolution will not require the re-occupation of Wall Street and the overthrow of the state, or any other such outsize gesture. A stroke of the pen would do, as Hockett’s brilliant new book elegantly explains: “What is proposed here is not for the public to ‘take over’ finance. It is for the public to end the private takeover of public capital.” In other words, the taxpaying public would be taking back control of assets it already owns, not expropriating other people’s money.
This is a model-building book of the kind Marx called a Robinsonade, the genre of economic theory that starts on a hypothetical island where isolated individuals reinvent the complexities of the state and civil society from scratch. Hockett begins true to form, with a household of two people who create a division of labor and increase their output of desirable goods—in this case, homework done well—by swapping chores, rearranging schedules, and storing or “saving” time for study. The point is that chore-time becomes a currency insofar as it can be recorded and remembered; insofar as it becomes both a promise of and a claim on future time; and insofar as both parties to the bargain are confident that the promise will be kept and the claim redeemed.
From there it is a few short steps to the realization that the Federal Reserve Notes we treat as legal tender are promissory notes in which we have the utmost confidence because we, the people, back them—we promise to redeem them as necessary, to honor the claims they represent —with the full faith and credit of our taxes, the dollars we pay to public coffers which in turn sustain the operations of the governments we have elected (or legitimated by casting our votes). These notes do not represent an antecedent accumulation of private wealth, they generate wealth by placing demand on resources hitherto undiscovered or unused, and they are a public promise kept, again, by we, the people.
Hockett takes us through these steps in prose that, though deeply informed by philosophy and political as well as economic theory, from Hegel, Marx, and Rousseau to Keynes, Minsky, and Wicksell, never fails to divulge the secrets of the temple where the money question now gets addressed by the high priests who perform open market operations. Like King, Wolf, and Lanchester, he treats the banking system’s private sector as a parasite on the public promises we make to each other with our creation and use of purchasing power. Hockett proposes to let it stand once the investment arm of a “National Reconstruction & Development Council” is established, but on the 19th-century terms Angus King borrowed from William Leggett, the “money crank” par excellence, and proposed in his book of 2015, The End of Alchemy: every dollar loaned by a private bank with a return on investment in view must be backed by an equivalent in collateral value, so that depositors cannot lose their savings because the bank has made bad bets.
Mind you, this is not pie in the sky. It’s a call to recognize an actually existing reality, to act on what is evident yet unknown, which is that public ownership of the banking system is already upon us. As Hockett notes, almost in passing: “For in effect private banking institutions are simply distributing that public resource which is the monetized full faith and credit of the United States, earning privatized seignorage for doing the credit checks [on firms and individuals] while being publicly licensed to play that role only so long as they maintain the ‘quality standards’ we demand through our franchisor Fed and its co-regulator, standards imposed by bank regulation.”
Taken together, these books demonstrate that if the question before us is not whether we will have socialism but what kind—do we accept statist, authoritarian command of civil society or do we democratize the control and allocation of resources that we, the people, already own?—then the elements of an answer are also already at hand. Nowhere has become somewhere, so perhaps we finally got the news.
