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on 6 August 2015
An extended version of 3 lectures Dr Streech gave in Frankfurt in 2012 based on a longterm analysis of postwar politics in EU. Three periods are examined - the first one of technocratic management by governments and large corporations based on steady growth, a middle period of wage stagnation and unrest when capitalism disputed labours' claim for an increasing share of steady-state growth, and the present period where neoliberalism appears to have triumphed over labour. While the first period was one of balanced budgets, the middle one saw the growth of private debt and the present one of government debt. Streech sees the EU as an undemocratic device to make the world secure for bankers Already in 2012 he predicted the Greek scenario and sees a return to national currancies, and possibly devaluation, as necessary to accommadate nation states with different policies.
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on 9 July 2017
Rather heavy going.
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on 7 July 2015
With this book I felt like someone had handed me a complete guide book to political economics. For once, everything had been laid out clearly into a single unifying story arch spanning from WWII to the present situation in Greece. Everything is explained and put in context of long-term political and economic trends.

Though the prose is a bit dry, almost academic in places, once I got past the first 30 or so pages it exploded in new concepts (and I consider myself fairly well informed). About every two pages I felt like alternately hurling the book out of a window, or punching a wall. Both of these are very good things! Wolfgang Streek brings all of the actors and their shenanigans out of the shadows for all to see. It is absolutely jaw dropping - the movement of western economies from the tax state, through the debt state, and now on to the consolidation state is mind blowing. I really feel like current affairs has been opened up to me, and I now understand it for the game of thrones that it is.

I won't spoil the ending.
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on 24 July 2017
Streeck’s book sounded promising and his general idea of buying time to maintain social peace through different methods (tax and benefits increase, lending at cheap rates through national banks, etc.) is appealing. But I hated his neo-Marxist biased approach opposing an abstract idealistic democratic approach incorporated by good trade unions representing the working force against THE MARKETS, presented as a super being threatening everything and terribly successful in depriving the masses of their legitimate share of income. Along these lines I found the film "I, David Blake" much more convincing. It is the story of a carpenter who loses his job after a heart attack, but is told to seek a new job if he does not want to lose his benefits, as a medical specialist (who is not qualified in medical terms at all) determines that he is fit for employment despite the categorical different views of this doctors. He fights his way bravely through the UK civil service or its outsourced parts, but cannot beat the internet and robots set-up to deny benefits, and the few human interfaces he meets are prisoners of the software they must use. Watch this moving if you can. It is so absolutely true and so tragic. What I hate with Streeck, this sociology scholar, and his cronies, is that they compare income, without taking into account what happens with this income. Yet income used to spend should never be compared with income used to invest. And Shreeck obviously does not believe that too much tax kills the tax. For him the state cannot collect enough tax. He ignores also the fact the “financial markets” are for the most part pension funds (particularly in Switzerland) and not one of the few billionaires. He is obsessed with Europe (Germany) but ignores that the world is tilting towards Asia. And during all the reading I wondered what the conclusion would be. I could not believe that his dream would be dismantling the EURO and going back to the failed Bretton would system, without even discussing why what failed would produce better results now than before. He completely overlooks the initial price increase exaggerations in Italy and Greece in particular following the introduction of the Euro, wihtout correspoding increase in efficiency - which requires a onetime correction - and he is obsessed with Mario Monti’s past at Goldman Sachs, repeating this statement numerous times! It is true the Europe has a serious problem with its currency and with the governemetns of the southern part of Europe liking to have inflation while Germany is obsessed with the need to avoid it. But if the Greek public sector did not want to accept the cut-backs needed, the Greeks, like the Italians, Portuguese or Spaniards want the stable EURO at least as much as the Germans or the French. The majority of the people in all those countries would not want to return to worthless national currencies, because the poor suffered more form the losses due to devaluation of loss of value of their currencies than the big exporters, another fact ignored by Streeck. It is true that the policies differences lead to high tensions, because the traditional politics in the south of Europe are incompatible with the stable currency. Streeck is right in pointing this out, but he ignores completely that contradictions lie within the voters who want tow incompativle things, i.e all the benefits without the corresponding costs. He prefers to oppose the markets to the unions, a XIXth century approach, which keeps him his job as director of the MAx-Plank Insitute, but does not help solve the XXI st. century issues.
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on 22 June 2014
In this useful book Wolfgang Streeck presents images of post 2008 democratic capitalism around his Tax State/ Debt State idea.

Speaking of the West, the Tax State covers the post WW2 period to the late 1970's showing manageable budget deficits, government spending on infrastructure, balanced corporate and union power and general national unity policies with a leftist slant that he clearly approves of.

The Debt State is a different animal involving what he calls the financialization of society. Basically he sees a radically changed world of instant communication and enormously increased competition with Western states unable to afford the welfare commitments that date from their industrial leadership. So what to do?

Streeck sees Neoliberalism giving birth to a Debt State in which private and government deficits are "financed" at low interest rates and savers are more or less obliged to take on more debt and speculate in the face of near zero returns on their capital. He records the way that public debt ballooned until 1993, private debt led to the internet (2000) and housing/banking (2008) collapses and how oceans of government QE credit are now giving us the current "recovery".

The core of the book is an interesting discussion of the way in which the Debt State interacts with Democracy.

Essentially debtors lose freedom whether they are individuals of governments, and he shows the neoliberal totemization of Market Confidence above all else, and the absolute abuse of this concept to cow politicians into accepting the whole neoliberal package of unrestricted movement of capital (with the associated threat), unlimited freedom to outsource, and the requirement that the public give 100% backing to the craziest leveraged Wall Street bets.

So far so good, but the author then suggests a dubious solution in returning to the Tax State when (in the opinion of this reviewer) he could have devoted more space to the fundamental issues of outsourcing and economic efficiency + a more positive views of the European Union. Just because it's been captured by "Marktvolk" doesn't mean that it's a bad idea.

This reviewer personally witnessed the Tax State of Great Britain in the early 1970's with high personal taxation, out of control government spending, Keynesianism, nationalization and a Social Contract in the context of an activist Socialist/ Marxist government. As Burk and Cairncross show in their worthwhile book "Goodbye, Great Britain: The 1976 IMF Crisis" it was a spectacular failure. Great Britain (1974-76) had the highest inflation in Europe, the lowest rise in GNP, the highest unemployment and the lowest output per man/hour in manufacturing and was seen to fail on all counts.

The author is somewhat surprised that Germany still has a successful manufacturing sector and could maybe have incorporated this observation into a broader discussion of outsourcing. Outsourcing (complete international economic freedom) is a central plank of Neoliberalism and is arguably the root cause of structural Western unemployment (and record corporate profits) and the collapse of the Tax State. If CEO's like Jack Welch have for years been applying his 70/70/70 rule (70% of research and development should be outsourced, 70% of that should be outsourced offshore, 70% should be outsourced overseas and sent to India) then surely this reduces employment and skills and generates budget and trade deficits.

The author seems to be too focused on Keynesianism vs Neoliberalism when in reality the debate has probably moved on. For example Joseph Heath in his interesting book "Economics Without Illusions: Debunking the Myths of Modern Capitalism" suggests that the Left and Right have both developed a malignant form of their respective ideologies. The Left has extended costly government "care" to whole sections of the adult population that like it but shouldn't receive it. The Right tries to dispense with government altogether and doesn't recognize that it is a vital framework for growth.

Heath also observes that at a fundamental level, societal/economic efficiency is not a Left/Right issue at all and is basically non-political. Your chosen system either gives you good value health care or it doesn't.

On page 172, Streeck says that, "In the Social World one never steps in the same river twice", which is probably true but there are still some striking similarities between the USA of 2014 and Germany of 1918 and his book has a notable Spengler like feel in its opposition of Staatsvolk (social justice) and Marktvolk (market justice). Both countries had/have intractable debts, a dominant market class, democratic gridlock, out of control special interests and failed taxation and both are resorting/resorted to covering current spending with money printing.

The difference is that Streeck sees salvation in a return to a Tax State whereas Spengler saw it in, "the final battle between Democracy and Caesarism, between the leading forces of dictatorial money-economics and the purely political will-to-order of the Caesars". An interesting difference.

With regard to Europe he seems unduly pessimistic. The EEC has brought peace, the free movement of labour and a single currency which do have some positive aspects which he ignores. Also, even the strongest critics of Europe (such as Nigel Farage of the UK Independence Party) are often not at all personally hostile to their fellow Europeans. They actually quite like Europe and only object to the grossly inefficient special interest Neoliberal Market Construction that has taken control of the project.

Nevertheless, this is certainly a key book in the conversation about the Debt State/ Democracy and is highly recommended.
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on 5 October 2015
Really interesting analysis of the political and economic history of Europee over the last 40 years. Like many such books one is caught up in the author's arguement and I'll probably read it again before deciding how convinced I really am by it. What I can say is that it's made me think differently about the current problems in the Eurozone, about democracy in Europe and within the nation states of Europe and about the aims and logical outcomes of the the policies that have been persued by all parties in power over the past 30 years. Anything that makes me think differently and to question my own assumptions is well worth the time taken to read it.
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on 19 February 2015
An important assessment of the distopian effects of today's under regulated free market capitalism which ignores the inconvenient fact that it caused the current crisis and survives only because of tax payer rescue funding. Politicians should be required to read this and answer searching questions about their complicity
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on 21 October 2015
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