Systemic Crises and Future Possibilities

In the 1970s the world-system entered a long period of economic stagnation. Core states suffered a sharp decline of profits in manufacturing as Germany and

Japan finally caught up with the United States.^[327] Many industries relocated from core countries to semiperipheral and peripheral countries with lower wage levels.

It is likely that US technological, production, commercial, financial, military-political, and sociocultural comparative advantages will continue to decline. The hegemon's increasing reliance on military superiority as an instrument of foreign policy may be partly due to the decreasing availability of other advantages. This seems redolent of the “imperial overreach” that was an important characteristic of British hegemonic decline.

In any case, the contemporary global system is rapidly becoming politically and economically multipolar. Though a new hegemon may rise, meanwhile we face con­tinued political-economic rivalry among increasingly equal contenders.

Wallerstein^[335] also contends that the modern world-system has entered, since the 1970s, into a systemic and structural crisis that will lead to the emergence of a qual­itatively different kind of world-system in the next several decades. The systemic contradictions of capitalism have produced system-level asymptotes (ceilings) that cannot be transcended within the logic of capitalism. These are the long-run rising cost of labor, increases in taxation, and the increasing cost of raw materials. These rising costs will sooner or later make it unprofitable to engage in capitalist invest­ment, and so a new system will emerge. Wallerstein contends that the new system could take the form of global egalitarian democracy or a global tributary state in which the elite uses state power and coercion to continue to extract surplus product from the global working class.

According to Wallerstein, the world revolution of 1968 was a turning point that marked a decline of centrist liberal ideology; this decline undermined the global political culture that had undergirded the main institutions of the capitalist world­system.^[336] Moreover, capitalists have experienced new pressures to raise wages, new pressures to source raw materials, and new pressures to pay for a wide range of expenses that they previously were able to externalize—expenses that are ecolog­ical (e.g., waste disposal), infrastructural (e.g., roads, communications, electrical power), and transactional (e.g., taxation in exchange for state provision of security, infrastructure, and social services, including education, health, employment, and pensions).^[337]

As capitalism reaches its limits to growth, captains of industry can continue to relocate production facilities from urban cores to rural peripheries where costs are lower.

Meanwhile the basic contradictions (or paradoxes or tensions) of capital threaten the perpetuation of the capitalist system. These include the domination of exchange value over use value; financial speculation decoupled from the social value of labor; unresolved tensions that set private property and individual interests against public property and collective interests; the state's incapacity to mediate these tensions; and capitalists' ongoing, private appropriation of the collective wealth of dispossessed workers, and a general, growing incapacity to slow the redistribution of wealth up­ward. At some foreseeable point, previously applied “fixes” will become too costly and politically unacceptable.^[338] Then only a fundamental transformation or sys­temic collapse will resolve these contradictions.

The capitalist world-economy—which was itself proceeded by other qualita­tively distinct modes of accumulation—is highly unlikely to last forever: Eventually it will evolve into another kind of system, perhaps after some global catastrophe brought on by inter-imperial rivalry^[339] or ecological disaster, or some combina­tion of the two. Given the destructive potential of modern weaponry, such another war among powerful states would likely disintegrate the modern world-system.

A useful distinction can be made between exploratory and normative forecasts. Exploratory forecasts—grounded on available data and aiming to analyze future perspectives objectively, in light of known causal interconnections and most fea­sible outcomes—tend to be reliable for a system that is functioning within known parameters. But in times of systemic chaos, parameters tend to be unpredictable. Then a certain small impetus—particularly at a bifurcation point—becomes more likely to result in systemic change. So the more a system is in chaos, the more rel­evant normative forecasts—b ased on agentive social change—b ecome. Such forecasts start from values. They portray a desired vision of a future and seek opportunities to reach it. The transformations can be revolutionary, interstitial (e.g., erecting new structures within the old), or symbiotic with the old system (e.g., social democratic).^[341]

The real utopias approach, elaborated by Erik Olin Wright, studies and promotes desirable and achievable alternatives to contemporary institutional structures that demonstrate the falsehood of the claim that there is no alternative to capitalist globalization. Examples range from worker-owned enterprises and crowdfunding, to guaranteed basic income and empowered participatory governance.^[342] Wright's approach complements that of Michael Burawoy's^[343] promotion of public sociology— reflexive knowledge for the general public and provision of helpful information to social movements by social scientists who are also social activists.