Capitalism,Structural Crisis and Contemporary Social Movements: An Interview with Immanuel Wallerstein

The ‘World Revolution of 1968’ and the Structural Crisis of Capitalism

Gaël Curty [GC]: In your works, you show that the capitalist world-economy has cyclical rhythms in which each cycle moves the system a little further from equilibrium. This process leads over time to structural crisis and the transition to a new system. In your view, capitalism entered into a period of structural crisis starting in 1968. Could you define your concept of structural crisis in more detail and explain why 1968 should be considered the starting point of the current structural crisis?

Immanuel Wallerstein [IW]: The first thing to note is that the received notion of cycles is inaccurate in important respects. They do not involve up and down movements so much as upward movements followed by stagnation. Over time, therefore, this results in a secular trend, visible in curves which rise toward an asymptote of a hundred percent of whatever you are measuring – an asymptote which by definition you cannot cross. This points to the fact that when you reach maybe 80 percent, the whole operation starts to shake terribly, and what I call a ‘structural crisis’ results.

The world revolution of 1968 – which actually went on from 1966 to 1970 and beyond – is important in terms of another ‘curve’, i.e. the growth over time of ‘anti-systemic movements’. Anti-systemic movements have a long history, but become significant for the first time in the last third of the 19th century. They become – and this is the curious thing about them – extremely strong in the period from 1945 to 1970.

Each of the two main types of anti-systemic movements, social movements and nationalist movements, had a debate about strategy. In each case, the debate was won by what we may call the ‘state-oriented faction’, i.e. the group that said, ‘the state is our enemy, but the only way we can handle it is by taking it over. We have to have a two-step process: first, achieve state power, second, transform the world’. Now, as I said, the peculiar thing is that although anti-systemic movements were relatively weak until 1945, they suddenly became strong in the period after 1945. Why was this? In my view, it was because that period saw both the greatest upturn in a Kondratieff wave and the strongest geopolitical hegemon that had ever existed, the United States. In this period in which both waves were at their strongest, somehow, anti-systemic movements thrived. That is not accidental. Instead, it is because a geopolitical hegemon or a strong producer in a Kondratieff upturn always, as the operator, fears most of all any slowdown, such as strikes in industry or equivalent events in the geopolitical arena. In order to prevent slowdowns, then, operators make concessions, but if making concessions solves the problem for 10 to 15 years, it also undermines their quasi-monopoly. What we can observe is that during this period the geopolitical concessions to the anti-systemic movements were considerable. By 1968, there was a worldwide recognition that anti-systemic movements had achieved state power in what was then called the ‘three worlds’. In the Soviet Bloc, communist parties were in power everywhere, in the pan-European world social-democratic parties were in power, or at least alternating in power with conservative parties in a situation where both really accepted the welfare state model as legitimate, and in the so-called ‘third world’ nationalist movements came into power.

Faced with this situation, the base staged an uprising in 1968, saying to those in power that they had achieved stage one of their program, but not stage two. For them, things were worse than ever. Inequality within and among nation-states was as great if not greater than ever. States were not more democratic; if anything, they were less democratic. The class system had not disappeared; the bourgeoisie had simply been renamed. The base was no longer interested in the ‘Old Left’, they wanted to find new methods for changing the world. That is one part of the structural crisis.

The other part of the structural crisis is related to how producers make money in a capitalist system, i.e. by selling at the highest possible price while minimizing costs as much as possible. As is well known, all producers have three costs generically: one is for personnel – all kinds of personnel; one is for inputs – all kinds of inputs; and one is for taxes – all kinds of taxes. Now, it is easy to show that over the course of 500 years all three of these costs have gone up significantly. As purchasing power is blocked and cannot go up any further, but the costs keep going up, the profitability of the capitalist system goes down. That is the structural crisis.

Structural crisis is the third stage in a system. It means that the system experiences a bifurcation. ‘Bifurcation’ is a technical term borrowed from physics: it refers to a situation where the fundamental equations expressing the dynamics of a system can be solved in two quite different ways. Translated into a social context, the bifurcation of a system implies a struggle between the proponents of one side and the proponents of the other side as to which ‘tongue’ of the bifurcation, which systemic outcome, will prevail. That takes quite a while to resolve; it is approximately a 70- to an 80-year process. If it is intrinsically impossible to know how the bifurcation will come out, one can nevertheless do a great deal to affect the outcome. People on each side work to affect it and at some unknown point – today, I would say probably 20 to 40 years from now – the existing system will tilt definitively to one side or the other, and a new system or multiple systems will emerge. The new system will then live its life: after having come into existence, it will have some normal features and will go on for however long it goes on, until its own structural crisis emerges.

Contemporary Social Movements

GC: As you just mentioned, when the system is in a structural crisis it has to bifurcate and people have to choose between alternative solutions to the crisis. Could you describe these alternative solutions and present the opposing groups who advocate them and their internal subdivisions?

IW: There are many people who are still not aware that the world-system is in a structural crisis and operate as if it were not, yet the fact remains that on each side there are some who are aware of the crisis. I call these two groups those representing ‘the spirit of Davos’ on the one hand and ‘the spirit of Porto Alegre’ on the other, naming them after the ‘World Economic Forum’ at Davos and the ‘World Social Forum’ which first met at Porto Alegre. The World Economic Forum was intended to be and has served as a mechanism for joint decision-making on the part of people who want an inegalitarian system. They have been coming together once a year for more than 40 years; the forum is an important venue for debate among the elites of the world. These elites include not only leading capitalist entrepreneurs but leading political figures, leading media figures, even leading individual intellectuals and so forth, all of whom get invited to this profitable operation. The World Social Forum came into existence as a means to oppose the World Economic Forum’s point of view; it has been meeting first annually then biennially since 2001. These are only ‘structures’, however. I speak of the ‘spirit’ of Davos and Porto Alegre to emphasize that it does not matter if these particular organizations go out of existence if there is something else that could replace them.

For the moment, however, these structures are the venues for each side, and each of them in turn is having enormous internal debates about strategy. On the Davos side, there are those who consider that the way they should handle this is by hitting people over the head as hard as possible and imposing a new system which will be equally or even more in their favor than capitalism. That is one group, and another group claims, on the contrary, that this strategy will be self-defeating. They consider that what you have to do is to co-opt people by offering them change, so that they propose to grant all kinds of concessions which are not real. Meanwhile on the Porto Alegre side, one group believes that the Old Left succeeded because it was verticalist. It claims that the Old Left was a top-down structure which insisted there was only one movement per country that had to take precedence over all the others and that any other kind of movements had to be subordinated to it. Another group reacted to the world revolution of 1968 by considering that the solution was to abandon the verticalist approach in favor of a horizontalist approach involving multiple movements which talk to each other, which analyze together, which work together insofar as possible, but involves no single leader, nor sectarian limits to its participatory structure. That is actually the old debate of the late 19th century still going on. The verticalist group says to the horizontalists that their horizontalism is all very well, but that they will get hit over the head and they will not win, while the horizontalists say to the verticalists that if they follow them, they will have the same problem that they had in 1968, they will achieve power but no transformation.

It appears to me that we are living in a world in which there are four and not two sides moving forward, which is very confusing. When people are confused, they act unpredictably – that is as true for economic producers as it is true of individuals fighting for a more egalitarian, more democratic world. We are living now in a terribly confusing time which some people call ‘chaos’. It is chaotic in the mathematical sense that ‘chaos’ means fluctuations that are enormous. There are always fluctuations, but while the system was relatively stable for several hundred years, its fluctuations always brought it back to equilibrium. They were small fluctuations: no matter how hard you pushed, you got pulled back. In a structural crisis, however, it is exactly the opposite: a little shift, or push, pushes the whole thing wildly. Here I come to a metaphor which is also a reality. Lorenz, who was an engineer, actually observed 40 years ago what he calls ‘the butterfly effect’. He said that the actual way any curve operates depends on its starting point, and if one moves the starting point slightly, it will make the curve go in a considerably different direction. The butterfly effect theory argues that every time a butterfly flaps its wings it is affecting the climate at the other end of the world a little bit, but that ever so little results in an absolutely unpredictable act.

I come now to what people who are concerned with whether we get a new system or systems can do. We can get one system that is as bad as or worse than the existing system – inegalitarian, hierarchical, polarizing, etc. – or we can get a system that is relatively democratic and relatively egalitarian – which we never had in the history of the world. These are the two ways it can go. Yet since every little effort can change things, we have to all think of ourselves as ‘little butterflies’. We can affect the balance and forces – that is what it amounts to for us over the next 20 to 40 years. By our actions, all kinds of actions – verbal actions, physical actions, etc. – we can affect the outcome. The point is that when we are living in such a highly fluctuating world, we can know that our efforts have some effects.

In conclusion, let me observe that this leads to a different perspective on the historic debate, at least in western philosophy, between ‘determinism’ and ‘free will’. Most people have argued that these are alternatives. Some have argued that everything is ‘determinism’ and others that everything is ‘free will’. I believe that we need to historicize that opposition. There are points in time where determinism prevails, i.e. during the normal operation of a system, and there are points in time in which free will prevails, i.e. when the system is in a structural crisis. If our grandparents were living in a determinist world and did not have many options – no matter how much they tried, they got pulled back to equilibrium – we now live in a relatively ‘free will’ world and can affect the situation. So, go forth and be effective little butterflies! We do not know how this will come out, but we have a chance! People always ask me at the end of any of my talks, ‘how much of a chance do we have?’ and I say, ‘fifty/fifty, but that is a lot, not a little!’.