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- [00:00]
A
Well, everyone, it's my great pleasure to welcome you to the LSE and to this evening's event. I'm Craig Calhoun, the director of the school, which is why I get the fun job of welcoming you. And I actually get to sit up here next to Emmanuel Wallerstein. It's a great honor to welcome Professor Wallerstein to the LSE today. As I'm sure you're all aware, Professor Wallerstein has had an extraordinary career of leadership in sociology, but really in interdisciplinary social science. He has played a leading role in a variety of different conversations, I think, probably most importantly through working in three domains of world systems analysis, the historical development of the modern world system, the contemporary crisis of the capitalist world economy, and the structures of knowledge. He has pursued these in a wide variety of publications, but also as a very active institutional leader, as the former president of the International Sociological association, as the chair of the International Gilbenkian Commission on the Restructuring of the Social Sciences, and as a leading force in developing the Fernand Braudel Institute and more generally, the Sociology Department at the State University of New York at Binghamton, which became an important center for world systems analysis. I considered listing all of Professor Wallerstein's books in this introduction, but that would displace Professor Wallerstein's talk, and it's important that he has a variety of new things to say as well as to repeat these. But it's most important, I think, to recognize the extraordinary achievement of his four volumes on the modern world system, which, beginning some 40 years ago, charted a rethinking of of historical social science and the nature of the contemporary world. On this historical foundation, he has also written extensively on the choices that are available for the 21st century, including utopistics, an account of these choices as they're available today, and on social science itself, including Unthinking Social Science, the limits of 19th century paradigms for Twitter users in the audience, Let me note the hashtag for today's event, lseiw, and let me remind everyone that there will be a time for question and discussion at the end of the talk this evening, Professor Wallerstein will speak on structural crisis of the Modern world system. Emmanuel, thank you.
- [02:51]
B
And you'll forgive me if I stay seated, but this room permits it because it's wonderfully graded upwards so everybody can see me and I can see everybody from here. I'm really talking about the end of capitalism as a system. That's a position very few people actually take. I have taken it for now, 30, 40 years at least, and the arguments that I have to make are rather complex and elaborate, and I don't know how much time, even with the extension of time that I've been given, how much time I'll have to make these arguments. So if I seem to go rapidly over various things, I'm doing that deliberately, but you can call me to order in the question period. Now, what kinds of arguments do I make? I make the argument, first of all that capitalism is a world system. A world, a world, not the world necessarily, but there is a zone which began in the 16th century, has expanded to include the entire earth, and is the unit of analysis that I use. That's very important in my approach. Secondly, capitalism is a historical system, because all systems are historical systems. There is nothing that is not a historical system, from the universe at the largest to the tiniest nano system. And when you say it's a historical system, what you mean is that it really goes through three phases. It comes into existence. That has to be explained. It isn't automatic, but I'm not going to do that today. It then leads what I call its normal life according to certain rules which it constructs and which govern the operations of all people and all institutions within the system, and can be spelled out. And then finally there's a third stage, which is I call the stage of structural crisis, where the system is too far from equilibrium, cannot survive, cannot survive, but will be succeed something else. So that's my premise. All right, now what. What I've called the third phase, the phase of the structural crisis of the capitalist world system is not a phase that lasts two days, two weeks, two months or two years. It started in the 1970s, it will go on perhaps to 2040, 2050. It's hard to predict exactly, right, so this is a longish phase. But the capitalist world system has existed for some 500, 600 years. Now, how did we get to the point where we're in a structural crisis? Okay, in the operation, in the normal operation of the capitalist system as a historical system, there are, in my view, cyclical rhythms, cycles, if you want, but cycles within the structure. And the two main ones, the two principal ones that affect the operation of the system is one that I and many others call the Kondratief, long waves, which are expansions and contractions of capital accumulation, and the hegemonic cycle, which is the expansion and contraction of a hegemonic power, hegemonic powers being necessary to make the other cycle, the Kondratiev cycle, operate. Now, these cycles have the following feature. First of all, they are self liquidating. That is to say the. When you. When the. As the two cycles expand, they create themselves the elements which bring them down, which force them to. I'm not. I won't develop that now. I have done that many times. But if you wish, I'll do it in the question period. And the second thing about a cycle is not only that there are these cycles, but they have what I call the ratchet effect. I was going to put it up here, but I see that's not really possible. Doesn't worry.
- [08:17]
A
If you want, there's a whiteboard here.
- [08:19]
B
Oh, that's the whiteboard. Okay, well a whiteboard is something new to me, but anyway, it's very easy. You mean I just used my finger.
- [08:31]
A
I'd recommend the.
- [08:34]
B
Okay, If this is time and this is percentage of something, then the ratchet effect is like this. Two steps forward, one step backwards. Two steps forward, one step backwards. That is to say, it's not possible to bring it all the way down again. And that therefore makes it able to approach higher point. That's the limits of what I'm going to do with the whiteboard. So. The two cycles reached what I consider to be their acme in the period roughly from 1945 to 1970. That is to say it was the period of the greatest accumulation of capital in the whole history of the capitalist world. And it was the period of the greatest expansion and intensity of power, of a hegemonic power, that is the United States in this case, in the history of the system. So you had this immense, immense expansion. And that became a good deal of the problem. Now what is the problem? The basic problem is that costs as a percentage of the price that one can charge for a given item by producers have been going up steadily for 500 years. Okay, so what are the costs of production? There are really three major costs and you have to analyze each one of them. The cost. One cost is personnel. A second cost is inputs and a third cost is taxation. And each of these costs are complex. Now let's take personnel. Obviously if you produce something, there have to be somebody there engaged in the production process. And there are really three kinds of people there. There are basically unskilled workers who work at a minimum cost. How does that operate? Well, that operates in the following way. A producer offers jobs. What do the. And these are of course very low in pay, et cetera. Over time, over time, workers at the bottom can engage in some kind of syndical action. There are many different kinds of cyndical action. But they put pressure on the producer to raise their pay. And there are many reasons why producers will want to raise their pay as long as they're making money, because they don't want any stoppage of work. So what happens when it gets too high? And we have a very good phrase in English, what happens? It's called the runaway factory. The runaway factory is as old as the capitalist system. That is to say, the producer moves his operation, which is an expensive thing to do, moves his operation to some other place which has, quote, historically lower wages. What could that mean, historically lower wages? Well, basically it means the following. If I move from where I am now and wages are getting a little bit high, and I move to someplace far away that has people in the rural areas who are not involved or minimally involved in the monetary system, you can induce these people to come and work for you at a price lower than you were paying in the place from which you moved, but which is for these people, an increase in their real income. So it's a win win situation at the beginning. Then what happens eventually, of course, is after about 25 years or so, that's just an order of magnitude, the workers who have moved into town or where the factory is usually in towns, and begin to feel more comfortable there, learn their way about, become more aware of the fact that they are being paid relatively low by world standards. And they begin, in fact to engage in some kind of syndical action. And after a certain while, all the employer can do is further runaway factory. So you can keep doing this over 500 years. Now, they're not the only personnel. The second set of personnel are middle cadres, right people, skilled workers, white collar workers, etc. And as time goes on and as production gets more complex, you need these more of these people for two reasons. One, you need them to operate the system, which has become a much more complex system. And secondly, you need them politically to help you repress the unskilled workers. And repress them in two ways, one physically, but secondly by example, because they, they indicate the possibility of upward mobility for a limited number of people. But that attracts especially the people who are likely to be the leaders of a syndical upsurge. And the third group, of course, are those on the very top, the 1%, who are raking in the money. And what's happened is these people are not engaged in earning profits, they are engaged in rent. The owners, the theoretical owners of the enterprise, are the shareholders. And as you very well know, shareholders get relatively little compared to the rent Collectors. And this of course, has been particularly spectacular in the last 25 years. The amount of rent that the top group can achieve. Well, that's. So that explains one cost. Then there's the inputs. Obviously, if you produce something, you need various kinds of inputs which you have to purchase from elsewhere. Right? Now there are three different kinds. The secret of capitalism is they want to pay as little as they can for the inputs by getting other people to pay their costs. And what are the costs that they can get other people to pay? First of all, there is in production, any kind of production, always some toxicity. What do you do with the toxic elements? Well, basically what you do is, is you throw them in the nearest river. That costs you very, very little. Right. It gets rid of the toxicity. The major problem with that is that over time, historically, there are no rivers left to throw it in. There are no more trees to cut down, et cetera, et cetera, et cetera. And suddenly we discover that we have an ecological problem. Right, and how can you solve the ecological problem? You can tell the state to clean up. And that of course costs money. So they're going to have to raise taxes to do that. In addition, the state is going to say if they do clean up, which is not very often, but if they do clean up, they're going to say it's crazy for us to clean up if next week you're going to throw more stuff in the river. So what we have to ask you to do is internalize your cost, not externalize your cost. Right. And the producers will say that will reduce our profits. Which is true. Which is true. Okay. Now the second kind of cost of inputs is replacing them. If you cut down trees, if you, after a while you don't have any trees left, so you have to replant the trees. Replanting the trees is a costly process. Historically, producers did not do that. They are now under certain kinds of pressure to do that. That's raised the cost. And the third kind of input cost is what we call infrastructure. There's no point in producing something if you can't get it to where it needs to go in order to be sold. And that means transport and that means communications. And basically, historically, producers have paid very little portion of this. The largest portion is that of the, of various kinds of states and so forth, various kinds of political structures. And again, that's become more and more and more expensive as we let things slide by in order not to pay the bill, and then it gets even more expensive, etc. So that's the second kind of cost and the third kind of cost is taxation. Everybody seems to think that taxes are low. They are not at all low. First of all you have to say who is taxing? And usually people only count the national state. But of course national states have units within them that also engage in taxation. There are all kinds of sources of political taxation, right, which has been going up over the years largely as a result of the work of the anti systemic movements in democratizing the states, that is getting them to engage in what we call the welfare state, which is money invested in education, in health and in lifetime support, pensions, unemployment insurance, et cetera, et cetera, et cetera. So the taxation has in fact gone up. It's perfectly true that it think of the ratchet effect. It's perfectly true that in the year 2015, taxes generally across the world are lower than they were in 1970. But the real point of comparison is with 1945, and you'll see if you do the exercise that the actual taxation levels across the world are higher than they were in 1945. That's the ratchet effect. Okay? Secondly, there are other people who engage in taxing. There's something called corruption. And we usually think, oh boy, that's the failed states, that's the south, etc. It is. Of course there's piles of corruption there, but it doesn't even begin to compare with corruption in the United Kingdom, United States, France, Germany, Japan, because that's where the real money is. And the corruption is absolutely enormous. Absolutely enormous. Okay? Now if you are the producer and you have to buy off somebody, whether he's in Malaysia or he's in the uk, it doesn't matter. That's a tax. From his point of view, that's a tax, okay? And those taxes have been going up. But there's a third, there's something called the mafia. Now the mafia are people who intrude on an unclear situation with, you know, the famous your money or your life kind of thing. So in fact, mafias are all over the place and growing, especially with increased shortages of various goods. And of course you have to pay them off. And if you pay them off, that's a tax. That's a tax on the producer. Now the mafias themselves of course, try to legitimate their money over two or three generations. So there's a succession of new mafias, but that's beside the point. So those costs have been going up. Okay, well basically the argument about capitalism and its limits is that the rising costs of production reached a point where More or less roughly in about 1970, or therefore where they were too high as a percentage of the possible asymptote. So some scholars have tried to say that when it reaches about an 80% point, it begins to shake instead of going up steadily. And that's the sign that we have gotten too near the asymptote. Now question, why couldn't you simply raise the price on which you sell the goods? That's what they did always historically, as costs went up, they simply increased the sales price. Why can you no longer do that? And the answer to that is effective demand. Now, effective demand, why? You're going to say, or people always say, but there's new technology, isn't there, that people will want to buy the new technology? And then there's growth, right? You see it every day, the stock market prices keep going up and up and up and up. Well, growth is an illusion. It's irrelevant, right? There are all kinds of ways you can play the game of getting higher figures on the stock exchange. But the crucial element in analyzing a capitalist system is not growth, but employment. And if you look at employment figures right, they have been going up steadily across the world for the last 30, 40 years. And there's every sign that they will continue to go up. Why will they continue to go up? Because we have reached a point where the producers are not producing anymore in order to. Because they don't have customers. Because we have reached the limits of now, that's the two limits there. One limit is if you save money by moving to new areas by runaway factories. You have to have rural areas from which to bring in these new, historically lower wage people. But we are running out of such areas. That's called the de ruralization of the world. And we're already at a 50, 60% and we're going up, up, up. So we don't have the possibility of bringing in these workers. The same thing with the exhausting, the. Input of detoxification. So we are running out of consumers. If you don't have consumers, you don't have effective demand. Henry Ford understood this very well. He paid his workers $5 a day, which was at the time before the First World War, a fabulous amount. Why? He said, because I want them to buy my cars and they're not going to be able to buy my cars unless they have the money, right? Okay, so if we've exhausted the consumers because we are not merely exhausting the factory workers, which we historically thought was the group we worried about, but now we're exhausting the white Collar workers. Because all these wonderful inventions that you, you know, the ipod, the this pod, the that pod, right, don't require people, very few people, right? So we are no longer employing people, moving them from factory work to white collar work, because we're running out of consumers in the white collar work. This is the fabled decline of the middle class that everybody is talking about. So structural crisis arrives. And what does that mean? Well, it means basically two things. It means bifurcation and chaos. Now, Bifurcation, technically it's a term that the physical scientists invented, right? When there can be two possible solutions to the same equation, that's a bifurcation. It's not supposed to happen. And in fact, the argument of the. Scientists of complexity is that it always happens at the point where you've moved too far from equilibrium. You get a bifurcation of two possible outcomes and you have chaos during. So what are the solutions to the bifurcation? Well, there are two possible solutions, right? I give them names, but you don't have to worry about the names. I call one solution, the spirit of Davos, and the other solution, the spirit Porto Alegre. Now, what do I mean by that? Well, I mean the spirit of Davos is to maintain. The objective is to get a new system that is not a capitalist system, but retains the worst features of capitalism, hierarchy, exploitation and polarization. Perfectly possible to do that in many ways other than in a capitalist market system. And the question is which ways they will find. And the other fork, which is the spirit of Porto Alegre, is to create a system which is relatively democratic and relatively egalitarian. I want to emphasize two things. One, relatively, there's no such thing as perfect equality or perfect democratization, but you can do an awful lot better than any system has in the history of the world. So these are the two possibilities. Now, what is the characteristic of a bifurcation? It has two things, two characteristics. They're crucial. One is you cannot, you can be sure of only one thing, that at the end of this process, you will be out of the capitalist system forever. Forever, I don't know. But for now, okay, and that, that. So we can predict. We know that the system cannot survive, but it's intrinsically impossible. It's not merely a lack of knowledge. It's intrinsically impossible to predict which of the two tongues of the bifurcation will win out. And that's what's going on now. The struggle over which of the two prongs will win out. Now, people say, yeah, but, you know, most people, I just Gave this talk or something similar to it two days ago and somebody got up and said, you know, most people are not convinced by what you're arguing. They, as far as they're concerned, the system can be reformed in one way or another and improved in one way or another, and it will go on. And he's right. Absolutely. Most people, most people think that the system will go on and they operate in the way that they think is normal, nothing special. Right? And the other thing is, the other answer people give you is, well, they're the bricks or other countries like the brics, right? Aren't they in fact increasing. Their access to wealth and so forth? Won't that solve the system? It may move it from Western Europe to East Asia or whatever, but it solves the problem. And the answer is that neither, right, the concept of people, that they can just continue to operate the system, nor the expansion of the bricks will solve the problem. They will make it worse. They will all make it worse because the system operates on the assumption that there's an unequal division of the surplus value. That's basically it. I usually say symbolically, it's 1%, 19% and 80%. One percent goes to the people on the very top. 19%, the people on the very top get an enormous chunk. The 19%, which are the cadres, basically get an in between amount. And the people, the 80%, are basically screwed. Okay? But if you expand. The 19% chunk, then what happens is you have basically less left for the 1%, and that undermines their interest in maintaining the system. So part of my argument is it's nothing new for people on the bottom to be angry about the system and every once in a while in various ways erupt against the system. What is in addition true now, which was never true before, is that from the point of view of capitalists, at least intelligent capitalists, the system isn't profitable to them anymore and they need to find a new system which can be profitable. Okay, Now. I usually end this by saying, look, people talk about determinism and they talk about free will. And it's the longest argument, not only within Western philosophy but within most philosophies of the world. Which is true? Are we in a world that is determinist or are we in a world in which there is free will? And I say that's the wrong way to analyze it. You've got to historicize these concepts. And what I say is when a system operates normally, it's basically determinist. That is to say, no matter how much Effort and energy goes into changing the system. It gets pushed back to equilibrium, to a moving equilibrium, to be sure, but pushed back to equilibrium. And my usual examples are the two classic examples of revolutions, the French Revolution and the Russian Revolution. And if you analyze the French Revolution starting from whatever point you want to start, 1787 or whatever, and you take it through, take it all the way up to the First World War, you will see that the enormous social effort that went into transforming France and the world was brought back basically to equilibrium. Mark Bloch wrote a long, long piece showing how the whole thought that we had, that France had, so to speak, eliminated what were called the feudal transfers was simply not true. Was simply not true. Okay, so the same thing with the Russian Revolution. The Russian Revolution was an attempt to complete a long standing effort of Russia to modernize, to industrialize, etc. And the Russian Revolution was an immense social effort. And if you look at where they were by 1970 and compare it to where they were in 1914, there isn't all that much difference. Okay, it was brought back to equilibrium. So, okay, but what happens in a structural crisis is chaos. And chaos means that there are sudden enormous movements in all directions uncontrollable. Uncontrollable. So I say what that means, or we can translate that into chaos is a time of free will, that is to say, there's nothing that brings it back to equilibrium. And indeed every little push in every direction affects the outcome. So I always end these talks with the metaphor of the butterfly. What we discovered 40 or 50 years ago was that the flapping of a butterfly's wings over here changes the clock climate at the other end of the world by just that much, but just that much changes the track so that it widens out and widens out and widens out. So the way one affects the outcome is by being a butterfly. We are all little butterflies. And if enough of us are engaged in enough actions which push in the right direction, the direction we prefer, we may be more effective than the alternative group, what I call the global right, as opposed to the global left. The global right is also trying to push things in their direction. And I don't have time to develop the fact that both the global left and the global right are internally split about what their strategy should be. But they are trying to make the system tilt in their direction. And if you come back in 20 to 40 years, you will be able to see in which direction it has tilted, and then we'll be into a new, qualitatively new system. Maybe a worse one if the global right wins, maybe a better one if the global left wins, but we don't know. Thank you.
- [39:38]
A
Well, thank you, Emanuel. That's rich and interesting and hopefully provocative. And we'll have a range of questions, and I'm going to take the chair's prerogative and ask a first one to get this rolling with that. So before we come to the ways in which small actions can have effects at a distance in the time of chaos and the butterfly effect and how we might change that, I want to ask about the other side, if you will, the butterflies on the right, perhaps. But I want to understand a little better the contrast you made implicitly between extracting rents and extracting capitalist profits and the key of that to the system and thinking about the global predicament today and the role of finance and in various ways, I want to ask to what extent you see the what's often discussed as sort of financial capitalism or the current face of finance as in fact a system from extracting rents, high rents to finance, or high rents to corruption in finance, like we've been seeing with the HSBC stories in the last few days. Do you see this as a continuation and intensification of capitalism more or as the search for another profitable system? In a way, a different than what you said, that if capitalists couldn't get profits within the capitalist system, they would search for another profitable system. How do you see this kind of intense reliance on finance?
- [41:14]
B
Yes, I didn't mention the word finance, did I? Look, what we call financialization is an absolutely normal part of the operation of the capitalist system. And here I call upon Braudel's analysis. Braudel said, look, what happens in what he called the higher level of the operation of economic systems is that there are some capitalists, some capitalists who are specialists, they specialize as producers, they specialize as merchants, they specialize as bankers. Right? And then there are some capitalists who are generalists. They don't specialize in anything. They're the ones that always win out because the generalists just go where the money is temporary. Now, what happens in a Kondratiev AB phase is that in the A phase, you make your money fundamentally out of production and you create new capital and you accumulate it. Okay, that's simplified. But that's what happens then when you have the B phase. Right. Basically what's happened in the B phase is that you aren't able to make the money out of production for the time being until we have a new upturn Right. You can make your money in finance. What does that mean, make your money in finance? That isn't taking rent, that is moving capital from one group of persons to another group of persons. So all it is, is a. Is a lateral shift. No new surplus value has been created by that. So some people lose out, other people gain. The intelligent capitalist is among the gainers, and as soon as he can, puts his money into some new kind of production which can create new capital accumulation. But I thought when you started, you were going to ask a different question. So let me answer the different question.
- [43:52]
A
Ask a better question of yourself.
- [43:55]
B
No, no, it's what is the global right you see thinking of as strategy? And they are split. They are split into two groups. One group, split, says, the way we can win in this struggle with the people of Porto Alegre is repression. Hit him over the head. Hit him over the head very hard. Don't give him any space whatsoever. This is basically what our dear Mr. Cheney advocates and has advocated for a long while. But he's not the only one, right? And that's a position. There's another group that says, now look, you know, you hit people over the head, you get them very angry. It doesn't work in the middle run. It may work in the short run, but it's not an intelligent way to handle them. Instead, what we'll do is the De Lampedusa strategy, right? We will change everything in order that nothing change. And how do you do that? You invent very tempting things. You talk about green capitalism, the sharing economy, the sharing economy, et cetera, et cetera, et cetera. And you hope by this tactic to persuade people who would have tendencies towards the global left to say, oh boy, these people are really doing something, changing something. Let's jump on their bandwagon now. I mean, I think, you know, somebody like George Soros is basically advocating that, has been for a long time. And so they're having that fight, okay, among themselves. And we, we're not even sure who's going to win out among the global right, the global left is, incidentally, also split. I can talk about that later. But what you have is an incredibly confusing situation where you don't merely have two solutions, you really have four solutions competing with each other in this. And of course, one can understand that most of us are pretty confused. Which adds, however, to the difficulty of the system, because in the confusion, we freeze. And that's a lot of people are freezing. And that hits the effect of demand very strongly. So we freeze geopolitically. We Freeze. In terms of the world economy. And we, we are like that and we're not being butterflies.
- [46:54]
A
Okay, now, butterflies, it is your chance to ask questions. May I ask you to wait for the microphone when you do so and to say who you are as you ask your questions. This will be first. Right over here is man in blue plaid shirt, striped shirt.
- [47:09]
C
Hi, my name's Peter from dcu Dublin. I guess my question relates to your last point. In terms of this sort of competition you referred to between the global left and global right and the potential for the new system to emerge. Through what avenues, in your opinion, do you think which avenues hold the best potential for the global left to achieve its preferred outcomes? I mean, do you think it's really possible to create existing institutions, institutional structures? If we look to the results of the election in Greece, for example, and the rise in popularity of the Podemos party in Spain, for example, do you think these sort of movements hold the potential to achieve the preferred outcomes for the.
- [47:56]
B
Of course, I said, I didn't mention the word finance. I also didn't mention the word anti systemic movements and that because just so much time. Let me briefly talk about that. Okay. Anti systemic movements came into existence, basically into real existence somewhere in the 1870s or so. What do I mean by anti systemic movements? Well, there were two. First of all, there were social movements which said the problem is capitalism and the workers have to take over from the bourgeoisie. And there were national movements who said the oppressed peoples have to get their independence, et cetera. And in the 1870s, these movements argued about the appropriate strategy. And there were in each of these movements people who argued the state is oppressive, the state is our enemy. We don't want to have anything to do with the state. We have to transform ourselves culturally and so forth, and that way we will win out. And there was a second group who said, look, the state is oppressive. Yes, you're right. And for that very reason you can't ignore it. You can't, because they'll just oppress, repress you. So you've got to engage in what came to be called the two step strategy. You've got to first take state power and then change the world. Okay? Now this group which were basically in the social movements were the Marxists of the two varieties, Social Democrats and communists. But they both had the same strategy. It's just some difference on how they'd get to take over the state. And then in the national movement, the political nationalists, they went out. They went out basically in the argument, and they dominate the scene until 1968. The world revolution of 1968 undid something. Basically between 1945 and 68, the anti systemic movements, that is the old left, Communist parties, social democratic parties, nationalist movements, came to power in almost all the world. A third of the world was governed by communist parties. What I call the Pan European world was basically dominated by social democratic parties. Of course it was alternating power, but in a system in which the conservatives said that they only wanted to fiddle with this, they agreed with the welfare state, basically. And the nationalist movements came to power in what was then called the third world. And what happens in 1968 in the world revolution? 68, among other things. This isn't the only thing is they turned the revolutionaries, the young revolutionaries, probably people in LSE as well as everywhere else said, look, you came to power, but you didn't change the world. There's as much economic space between the wealthy and the poor as before. Our systems are not more democratic, probably less. It's not true that there's no class system. You just call it now the Nomenclatura or some other such name, but it's also a class system, et cetera. You deceived us and we've got to move on from you. Now what that did was liberate the real left and the real right from their domination by centrist liberalism. And we returned to a system with three ideologies competing with each other. And suddenly we saw the global right took enormous advantage of it in 1980s and 1990s by bringing down governments, by forcing the Washington consensus on states all over the world, et cetera. And then we have the. They run out of their. They exhaust their welcome, so to speak, because what happens is they do not in fact offer significant improvement in the basic living standards of most people. And we get the return of the global left. What's the return of the global left? I'm abbreviating very fast. It's the Zapatistas, it's the Seattle demonstrations, it's the founding of the World Social Forum in Porto Alegre. Now the interesting thing today, or the global left, is we thought that in 1968 with the uprising of the revolutionaries, that we had liquidated. The revolutionaries thought that. That they had liquidated the whole so called verticalist position of the old Left, that they were the verticalists. I see I have to spell out still more. The verticalists historically said, look, there can only be one movement in any given country. Coming to power means coming to power in a particular state. All other movements have to be subordinated and defer their demands until our one movement, the major movement or the main movement, wins its revolution, which in one case is the social revolution and the other case is the national revolution. And they were able to persuade, in effect the right and the left to subordinate themselves to the centrist liberals. What happens now, 40 years after the so called horizontal won out as opposed to the verticalists, is that the whole issue has been reopened exactly as though 1968 hadn't happened in the global left. Today we have a renewed verticalist camp and a renewed horizontalist camp. We have groups that are saying you have to take political power and the other group saying you can't wipe out the people at the bottom. Look, this is very clear and very visible. If you look at what happened in Latin America in the 1890s, 1990s and 2000 first decade, in one country or another, in 80% of the countries, a left or center left movement came to power in most cases for the first time. The basic explanation of that was the decline of US hegemony and its ability to do things in Latin America. But they did, they came to power and then they tried to create Latin American structures from which the United States and Canada were excluded. And they did create a number of such structures, right? So we have these people in power in Brazil, in Venezuela, in Ecuador, Nicaragua, et cetera, but even in Chile, right are more centrist, but still claims to be left of center. Okay? Now all these governments, all these governments say we have to develop the country. And the way we develop the country is we engage in extractive activities, mining, but all other kinds of extractive activities could be logging, etc. Etc. Etc. In order to have the money with which to allow people to live a better life. And then there are groups who call themselves indigenous, who say what you are doing, what you are doing is in fact destroying movie with your extractive activities. What you are doing is destroying our traditional areas and undoing our communal life, etc. And therefore we say you, the extractive leftists, are doing the same thing that the previously conservative governments did, against which we were fighting. To which the extractive government say you are doing the work. You, you are allying yourself with the right wing in our countries who want to stop these left governments from engaging in their redistribution and their taxation. And also you're objectively doing what the United States wants you to do, which is weakening our governments. So what we have is two elements of the global left refusing even to talk to each other, not to speak of resolving the problem. And there we're right back to where we were prior to 68. So that's my two wings of the global left, and there were my two wings of the global right, which is the four possible places we are moving.
- [60:12]
A
Okay, thanks, Claire. Hang on so I can see her at row five or six there. And I'll keep your hand up so we can get you the microphone.
- [60:25]
D
Hi, I'm Claire Hemmings. I'm from the Gender Institute here at lse. Can you hear me?
- [60:30]
B
Why don't you get up? Because it's a little harder.
- [60:32]
D
You can't hear me?
- [60:33]
B
Yeah, go ahead.
- [60:34]
D
I don't think getting up will make much difference. Thank you very much for your talk. I was. The very large macro historical view that you provide, I'm largely persuaded by. And I think one of the reasons is. Can you not hear me? Can you hear me, Craig?
- [61:02]
A
Yeah.
- [61:03]
D
Can you hear me now?
- [61:05]
B
I can hear you now.
- [61:06]
D
Okay, great. So I work here at the Gender Institute at lse, and I was going to ask you two questions. One is about the role of reserve army of labor in your analysis, which I.
- [61:21]
B
The role of what? Labor.
- [61:23]
A
The reserve army of Labor.
- [61:24]
B
Reserve army of labor, yes.
- [61:27]
D
And the other is my own experience of feminist social movements is one of profound disappointment for the reasons that you describe, which is that inevitably whoever comes into increased work is likely to want the same privileges as those people who precede them. But I really struggling with what it means to try and change people's values. How do you change what it is that people want?
- [62:00]
B
Yes. Well, the reserve army of labor, there are no jobs for them. That's the real problem. The reserve army of labor historically really meant that if you push people out of the labor force and then they came in elsewhere because something new got expanded. Right. But in order for that to happen, there has to be the possibility of new production. And in order to have new production, you have to have basically a. That was my answer. You have to have effective demand, and that is now. How do you change people's values? Well, I'll be honest. Very hard. You know, sometimes I say, look, look, there are three things we all need to do. One is intellectually try to figure out what's happening. Okay? And that's a matter of enormous conversation. That's what I'm doing right now with you and you're doing with me. We're trying to figure out what's happening in the world, okay? That's a task everybody has to engage in. Once we think we figured out what's Happening, we make our moral choices. That's where the values come in. What kind of a world do you really want? And you know, it may be that you think that the best kind of world that you could possibly have is a kind of renewed social democracy and you're going to throw your eggs in that basket and others say no, that's a historically failed alternative and we want something more serious, etc. That's a debate about moral values. And then once you've resolved that debate, you have to say now what politics would actually most likely implement that? And that's another question. But these are not three separate groups. These are things we all must do. But the second one is, I would agree with you, is the, is the hardest to. Sometimes the indigenous movements in Latin America talk about, how shall I say, changing our civilization, by which they really mean what you're talking about, about changing values and trying to persuade people that growth per se, there's good growth and bad growth. Growth can be a cancer. Cancers are growths, aren't they? So it's a matter of balancing, of trying to figure out what collective effectively would optimize the good life. WAYNE VIVIR In Latin America, the good life for most people or all people. And that's a debate. And when we're, if we get to the point where we're really having that debate, we're doing well. Okay.
- [66:07]
A
Okay, good. There's a question in the second row, center. Oh, if you've seen someone else first, that's fine. So teal sweater in the second.
- [66:17]
B
Yeah.
- [66:19]
A
And the next one will be in the first row right over here.
- [66:22]
E
My question is, with respect to Egypt and the Arab Spring, do you see the fact that the spring happened itself as an act of free will and chaos, or do you see the fact that Egypt's gone from one kind of repression to another, an act of going back to a state of equilibrium, so to speak.
- [66:45]
B
Yeah, well, Egypt is a very good example. Basically, Egypt was an awful dictatorship with. A president, I guess he was called a president. And when the, when the Arab, whatever it is, spring, I don't really like that phrase, but when it started in Tunisia, Right. It caught on in Tunisia and then a few weeks later, people started to imitate it in Egypt and we all applauded and remarkable. It suddenly he had to flee or resign. He didn't get to flee. Okay. Now Egypt was basically run for the last 50, 60 years by the army. They had front men of various kinds. Now what happened when the young people able to get people into the streets and do what they did and turn. Force the president to resign and so forth. Two groups jumped on the bandwagon immediately after that, right? One group was the Muslim Brotherhood. The Muslim Brotherhood had had a kind of deal with the regime. They were allowed to have certain limited rights and they could have certain members of parliament. They could get some things they wanted provided they didn't create too much fuss. And the second group that jumped on the bandwagon was the army. And they said, oh, it's wonderful. The people have spoken and we support. Now both these groups jumped on the bandwagon and this is typical of how armies operate and repressive forces operate. They jumped on the bandwagon in order to take over the process, and they succeeded in taking over the process. And then. So then we get this uneasy period when there is a. A new leader of the army and there is a Muslim Brotherhood wins the elections and the Muslim Brotherhood thinks they can move a little faster than. And the army says no go. We run the show. We've always run the show. We're running the show again. And they took over. So. And now, of course, even our president is being released from his prison and his sons are being released and so forth and so on. So the message from that is that the spontaneous uprising has to beware of the people who join in to support them a little late to take them over, whether they're capable. I consider this part of the chaotic situation now. And then we could go on about how the. How should I say, the geopolitics of the Middle east and its complexities are all part of the chaos and the unpredictability and the constantly changing geopolitical alliances and the fact that it's pretty hard to find who are the good guys.
- [71:12]
A
Okay, place in the front here.
- [71:15]
B
Thank you.
- [71:16]
F
I must.
- [71:17]
B
Here.
- [71:18]
F
I'm Elon from Brazil. So taking the good guys and also back to Latin America, the left in Brazil and perhaps also Argentina and Uruguay. Not Uruguay, but Argentina. They felt they were betrayed by the current leftist governments. And it feels like this model has run out. Brazil is not growing anymore. So is Argentina. They have been, well, inequality. There have been certainly social improvements, but still the elite is richer than ever. The same with, I don't know, China, who would be supposedly an alternative. So I would just like to be more optimistic about this global left.
- [72:00]
B
But you want me to tell you what to do in Brazil? You've just pointed to another. I mean, there's not only the split in Brazil between the people in the Amazon who say that they're coming in anyway. You promised they wouldn't, but they're coming in, they're chopping down our trees and so forth and so on and killing our leaders and so forth. And you're not protecting us. But there's also, of course, more urban elements who said you really were going to go much further than you said. But they're saying that everywhere. See, it's not just Brazil. They're saying that in Ecuador and they're saying that in Venezuela, okay, not to speak of Chile, you know, so and in, in some sense, you know, the ultra conservative government of Colombia doesn't look so bad these days compared to these others. So what can you do? Well, yes, of course, Brazil has run into the collapse of the petroleum market and everybody has. That's, of course, also something that's been going up and down wildly and will continue to do that. Right. And it's not, it's only partially manipulated politically. It is partially manipulated politically, but it's but with too many players. Saudi Arabia's position is not the same as the United States position, for example, on that. And of course, it hurts any government who was dependent on that. Well, you know, that's also the state of Texas. I mean, it isn't only the Lula or. Correa or any of these governments that are being affected by this collapse. And if tomorrow it goes suddenly up, and it may, it may very well because. The Saudis are playing along for the time being, but they risk losing because part of the game in selling oil is not merely the price you pay, but the continuity, the market share. And they're worried about losing a market share permanently to other places. So you don't know what their politics is going to tell them to do three months from now. If you're sitting in a country which is being affected by this, you may say, look, if we can hold out for 18 months, who knows? So they tighten their belt for 18 months. Can they get their population to go along for tightening their belt for 18 months? Well, that varies. In some places they may and some places they don't. Lula actually played a kind of brilliant foreign policy game for a long time and did get structures, SELAK and what's the other one, UNASUR and so forth. And this really did weaken the United States still further and create a different atmosphere in Latin America. But he also did other things.
- [76:14]
A
Okay, we got a. Yeah, a couple more here. May I take, say a couple of questions and you answer them together?
- [76:21]
B
Fine.
- [76:22]
A
Good. Okay, go ahead.
- [76:24]
G
Thanks. Thanks very much for your talk. My Name is Elizabeth Saleh, anthropologist from Goldsmith. Can you hear me?
- [76:32]
B
Yeah, can you see me?
- [76:35]
G
Basically, I was very interested to hear. I would be grateful to hear, furthermore about the possible methods or forms of restructuring knowledge during this period of the structural crisis. So in relation to education regimes, in relation to. To value such and such. And I think it's a very important question given the place in where we're sitting today. So thanks.
- [76:58]
A
Okay, great. And there's a man in the very back. I can't talk to you if you had your hand up or not. Maybe not. Okay, then another one in the center here behind his computer. Right in the center with his computer.
- [77:11]
B
Yeah.
- [77:20]
H
I'm a visiting research fellow at King's College and about economic history, or in order to have the alternative system, I think there might be some economic thought is needed. The new for the new. Or since we have one steady state, in order to deviate to another one, what kind of theory can emerge from economics or from alternative disciplines? Have we already seen the start of such alternative way of thinking? Or it's not yet come.
- [78:06]
A
He's asking, in order to move from one steady state to another, do we require the intellectual assistance of a new way of thinking, an alternative economics or something like that? And have you seen this emerging?
- [78:20]
B
Yeah. Okay.
- [78:23]
A
Okay. And is there one more question or should we close it there? Yeah, in the gray sweater by the aisle.
- [78:31]
I
I would like just to make a question to the professor about the butterfly effect. Do you think this kind of idea of butterfly effect can apply to other kind of any kind of change in whatever kind of social and economic environment?
- [78:52]
A
Okay. Do you think the butterfly effect can cumulate into a complete structural change? Is that the question?
- [78:58]
I
Yeah. For every kind of social. For every kind of social and economic environment. So that means not only for politics or government, for industry or something like that.
- [79:08]
A
Okay. Can this affect everything, not just politics and economics? Okay. Do you want to give a try to those three?
- [79:13]
B
Okay. Well, actually, they're more or less the same question, but it's another lecture that is to say, look, the structures of knowledge that we live amidst, which explain the coming into existence of the London School of Economics and Political Science, among other. Many other things. Right. The structures of knowledge in which we exist have not been eternally there. They were more or less created in the late 18th century, beginning in the late 18th century, as a part of the process of transformation of the modern world system, which, if I abbreviate, enormously resulted in what we call the divorce between science and philosophy and the assumption that they had different methodologies and that they both thought the other was wrong. And there were the strong versions in which both said the other is nonsense and they're softer version which they said, well, we'll split the bill, you let us have this part, you have that part, kind of. Okay, so. And this resulted in the revival of the university, which doesn't go. LSE and Oxford are as recent as each other. Because the fact that there was something called Oxford in the 13th century is irrelevant to the modern university which emerges in Oxford and everywhere else in the late 19th century with its departments, with its degrees, with its full time students and its full time faculty and etc. Etc. Etc. Now, this system of knowledge actually blinded us to an awful lot of what was going on, but it was part of the normal system. When that normal system begins to come into question, so does the systems of knowledge within it. So we have the emergence of complexity science, we have the emergence of, what are they, cultural studies in the broadest sense of the term and so forth, which both basically argue that instead of moving apart, they are in indeed now moving towards each other and towards the recreation of a single structure, of a single methodology of analysis. Reaching closer, how shall I say, they are now part of, part of a crucial part of the transformation process. Because they speak to the first question which I said. You have to deal with three issues, the intellectual one of what's going on. If we can't resolve this methodological issue, we can't see what is going on. Is there progress? Yes and no. I mean, yes, there is more awareness today than there was say 30 or 40 years ago of the limitations of the structures of knowledge of which we were apart. There's still a lot of resistance to change. You have to, how shall I say? You have to take into account the politics of transforming the structures of knowledge. Because disciplines are three things. Disciplines are claims to turf, right? Disciplines are structures of governance and disciplines are cultures. Okay? Now even if we change the first, even if we get to rethink the intellectual issues, we have to implement them. That means we have to transform institutions. What institutions? Institutions like universities, institutions like international structures of, of knowledge, etc. And the people who run those things are very resistant for good reason. If you're a 45 year old head of a department in a university and somebody comes along to you and says, now listen, this department as a claim to turf, makes no intellectual sense. It was something you invented in the 19th century and for the following reasons makes no intellectual sense at all. So we should merge your department with 10 other departments and then see what happens. And this 45 year old says, and what happens to me when we do that? I've invested in building this structure to moving up in it. If you merge me with 10 other departments, I may be out completely. So I don't buy it. And I give you the following reasons. And he gives you the following reasons. Irrelevant what reasons he gives you. So the fact that intellectually the present structures of knowledge don't make sense, and I don't have time to argue that, but don't make any kind of intellectual sense doesn't mean that you can transform the structures of knowledge. But if you can't transform the structures of knowledge, you won't be able to have the butterfly effect. So everything turns back upon itself. It's all intertwined and I guess. So do we need a new way of thinking? Yeah, we need a new way of thinking. That's absolutely true. Do we need. Will it change the stuff, socioeconomic environment? Yeah, if the camp of Porto Alegre wins. And if not, it won't.
- [87:21]
A
All right, as we near the end here, I'm worried that there might be an excess of pessimism in the audience. And so I'm going to try to rectify that in the spirit of Wallerstein, which is more on the side of the spirit of Porto Alegre. We've got two big reasons to be pessimistic that have surfaced here. One is that we shouldn't try to wish away the deep rooted structures of knowledge or political economy. They really are deep rooted. We can't just wish them away. The other is that we are eventually disillusioned by every social movement. Now that's pretty pessimistic. The optimism here, I think, is Emanuel said, at the very beginning, history happens. It always happens. Even when we tend to imagine that what exists is the permanently normal, change always happens. So believe in change. And second, in the chaos of systemic crisis, seemingly small actions and new ideas, even seemingly small ones, can cumulate in large effects. So believe that you can help produce change. Now join me in thanking Emanuel Wallerstein.