Capitalism will be just fine, though we’re fucked, very fucked.

In all seriousness, I think economic systems will look very different in the year 2100, when the vast majority of us are gone. 3D printing may have a huge impact on manufacturing, decentralizing it the way media has been. Scarcity-reducing automation will also be a great boon and bane simultaneously, taking much drudgery from our hands–but also paychecks. AI and robotics may not be destabilizing only for workers but for capital as well. Why, exactly, would anyone need to own a fleet of driverless cars or a lights-out factory? Couldn’t such outfits be self-owned and self-sustained?

But while markets will probably be very different, I think they’re stubborn things. I don’t believe they began as an accident but because of something deeply embedded in us–something evolutionary. They may be transformed, but I would guess they’ll persist.

Economic sociologist Wolfgang Streeck is far more dubious about the future of capitalism, believing we’re watching the system run aground. The title of his recent essay in the Socio-Economic Review doesn’t mince words: “On the Dismal Future of Capitalism.” The opening:

The writing is on the wall, and has been for some time; we must only learn to read it. The message is: capitalism is a historical social formation; it has not just a beginning but also an end.1 Three trends have run in parallel since the 1970s, throughout the family of rich capitalist democracies: declining growth, rising inequality of income and wealth and rising debt—public, private and total. Today the three seem to have become mutually reinforcing: low growth contributes to inequality by intensifying distributional conflict; inequality dampens growth by curbing effective demand; high levels of existing debt clog credit markets and increase the risk of financial crises; an overgrown financial sector both results from and adds to economic inequality etc. Already the last growth cycle before 2008 was more fake than real2 and post-2008 recovery remains anaemic at best, also because Keynesian stimulus, monetary or fiscal, fails to work in the face of unprecedented amounts of accumulated debt. Note that we are talking about long-term trends, not just a momentary unfortunate coincidence, and indeed about global trends, affecting the capitalist system as a whole and as such. Nothing is in sight that seems only nearly powerful enough to break the three trends, deeply ingrained and densely intertwined as they have become.

Moreover, looking back we see a sequence of political-economic crises that began with in- flation in the 1970s, followed by an explosion of public debt in the 1980s and by rapidly rising private debt in the subsequent decade, resulting in the collapse of financial markets in 2008. This sequence, again, was by and large the same for all major capitalist countries, whose economies have never really been in equilibrium since the end of postwar growth. All three crises began and ended in the same way: inflation, public debt and private debt initially served as expedient political solutions to distributional conflicts between capital and labour (and sometimes third parties such as raw material producers), until they became problems themselves: inflation in the early 1980s, public debt in a first consolidation phase in the 1990s, and private debt after 2008. Today’s political fix is called ‘quantitative easing’: essentially the printing of money by treasuries and central banks to keep interest rates down and accumulated debt sustainable, as well as prevent a stagnant economy from sliding into deflation, at the price of more inequality and of new bubbles in asset markets building and, eventually, collapsing.

The fundamental nature of the crisis is reflected in the extent to which the captains of capitalism have lost orientation and find themselves reduced to devising ever new provisional stopgaps until the next unpleasant surprise catches up with them. The wizards have become clueless. How long can quantitative easing go on? Is deflation the problem or inflation? How does one know a bubble before it blows up? Is growth restored through spending or through cutting back on spending? Is stricter financial regulation conducive or harmful to growth? Until the mid-1970s, growth was to result from redistribution from the top to the bottom; then, when Keynesianism was succeeded by Hayekianism, the opposite was true and markets were to be set free to redistribute from the bottom to the top. Now, seven years after the disaster of 2008, there is still no new growth formula and confusion rules the day. State-administered capitalism has failed—that is, was rejected by the owners of capital as too costly for them, to be replaced with free-market capitalism, which has also failed. For the time being, central banks act as regents waiting for a new ruler. But who would this be, and what would be his recipe for holding the capitalist enterprise together?

I suggest that after more than 200 years, capitalism has become unsustainable as a result of having become ungovernable.•