Buying Time: The Delayed Crisis of Democratic Capitalism

Buying Time: The Delayed Crisis of Democratic Capitalism

The topic is so spicy 🌶️🌶️🌶️ that I don't want to waste your time with the book review here. Read my The Book in (super) brief.

Now, this book is crazy, funny, extremely entertaining! Picturesque, bizarre, extravagant!

What I really liked and found super interesting about it is that I do agree with the main conclusion (the centralization of decisions at the expense of democracy) for entirely different reasons.

Before beginning, this is the best quote from the book (one of the best ever read, actually):

“The transformation of the Keynesian political-economic institutional system of post-war capitalism into a neo-Hayekian economic regime.”

Immediately this comes to mind ⬇️⬇️

Ok, let's start.

Streeck describes economics and free market as dangerously expanding at the expense of democracy and state control of capitalism. As a brilliant scholar of the left, he sees in reforms of liberalization and privatization the disappearance of political control on “the capital” and the divestment of social security programs.

As a result, economics is increasingly insulating from democratic politics, that is, politics “of the ordinary people.”

This means that political decisions on what matters in economics are being taken at a higher and higher level, that is, in Brussels at the headquarters of EU. People are not participating or deciding on economic issues anymore, nor are the politicians they elect, as those issues are not being debated at the state/national level but at the EU level. With this Streeck means the end of democratic control on “capital.” He highlights that just giving people the possibility of voting on EU’s presidents is not democracy, is façade democracy. And it’s kind of a joke.

Photo by Frederic Köberl / Unsplash

Streeck thinks that taking decisions at the EU level, that is, increasingly detached from the people’s (read: democratic) control and accountability, is the intended consequence of some neoliberal/neo-Hayekian program. He thinks that neoliberal reforms ARE INTENTIONALLY AIMED at taking decisions at the EU level and escaping any kind of democratic accountability. Accountability will come from free market feedbacks.

GOATS of the Neoliberal Order. From left to right: FA Hayek, Milton Friedman, Ronald Reagan, and Margaret Tatcher

The way this neoliberal program has been carried out, he writes, is the passage from a “tax-state” to a “debt-state.” This is a crucial point of the book because here lies the alliance between politicians and neoliberals. With 1970s crises politicians realized they were not able to provide welfare just with the extraction of taxes, but they had to go into debt. By going into debt, they allied with the financial markets, which means, they sold part of their sovereignty either to markets (to finance their debt) or the EU. This is the shift from tax state (when taxes were enough to finance welfare) to debt state. At the same time, they privatized and liberalized some public services, but this wasn’t enough to avoid going into debt.

The end of the story is that states have lost most of their sovereignty in economic decisions. These decisions are now taken by “free markets” and EU technocrats, he argues. This is the completion of the neo-liberal/neo-Hayekian program.


While I am skeptical about how Streecks describes the process neoliberalization, I agree with his conclusion.

Note: Throughout the book we are not given a clear definition of “neoliberal” / “neo-Hayekian” reforms; they are just defined as the very outcome of the process he is describing.

For sure classical liberals and Hayek in particular never aimed at distancing economic and political decisions from individuals (in support of his theory Streeck mentions this 1939 article by Hayek, but I think he's misinterpreted it, IMHO).

So, Streeck seems to be correct when he describes the centralization of decisions that is occurring at the EU level, and the potential replacement of democracy (read, the people voting) with a government of technocrats. This is our reality. However, it's unfair to define this outcome as the result of anything that is related to liberalism and Hayek. I would better relate it with some planning policy, which is usually associated with good old socialism. The idea is that experts can decide better than individuals and centralized decisions are better than local ones.

For making economics work – and any system of decision-making more broadly – the participation of individuals in the process is crucial, classical liberals contend. Individual knowledge is key and no committee or president at the EU level can gather their knowledge and take better decisions for their lives, the states they live in, or “the Environment,” than those that individuals themselves would take.

This is not the result of any force of “the capital” or capitalism but of continuous, permanent, and conceited government intervention. State governments intervene in the market because they think they have more and better information to face crises; and they can face them more quickly. Following this way of reasoning, sooner or later state-level governments are not enough when crises start to be considered “international” or “transnational.” State-level governments would have inaccurate knowledge and would be slower in the event of international crises. Result: we need some higher entity with better and more information deciding and facing these crises. In Europe, the EU has been the solution. Started as an economic free trade and free movement area (beautiful, amazing idea) it increasingly became politicized to address “higher” problems that couldn’t be handled by member states only (worst idea ever). In this way, citizens are disempowered, their knowledge is inaccurate and useless in the eyes of EU organs and bureaucrats.

My Take Today

There is something really funny that I see among my European peers.

They define themselves as “citizens” of Europe. It must be a joke. Feeling listened to and taken care of because you have voted for the EU President, it’s a joke.

By describing yourself first of all as “European”– which seems to be very fancy and cool among young people – you are just disempowering yourself. Nobody in the EU really thinks that your knowledge about where you live, about what you’d think a better future looks like, is important. Nobody’s gonna ever ask you and your vote doesn’t count much on these issues. And you don’t know anything about the EU; it’s so big, you may have learnt something at school, but that’s it. There is someone else there who knows better than you and can do without your opinion whatsoever. When you are a citizen of the EU you count zero, niet, nada. But I understand you feel comfortable because you have found what seems to be a more open and diverse tribe than your unknown municipality. But it’s just tribalism under a different guise. Instead, the place you really come from, where you live, the place you know, it’s the place which values you and your knowledge.


I come from the proud people of Primiero-San Martino di Castrozza (Sud Tirol) and Bergamo (Lombardy) in a georgaphical area conventionally called "Italy." I know what happens there and my local knowledge would be relevant there only. And I think it is 100% fancier than being “European.”


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