Nationalism and Capitalism’s Ever-Spiraling Crisis

Review of Streeck's Taking Back Control and Merchant's Endgame

Jacob Wilson

March 18, 2025

Taking Back Control?: States and State Systems After Globalism

by Wolfgang Streeck

Verso

2024

Endgame: Economic Nationalism and Global Decline

by Jamie Merchant

Reaktion Books

2024

Across the political aisle it seems as if neoliberalism, financial capitalism, globalization—whichever you prefer to call it—has run its course. The enemy of the United States and its residents is no longer terror in the abstract; we are now supposed to fear China for its economic might; the United States’s national identity is supposedly under attack from the migrant crisis at the US-Mexico border; and US global hegemony is beginning to fizzle much to the chagrin of media pundits and war hawks. As its economic and political might wanes, the United States has shown its unwavering commitments to supporting Israel’s genocide of Palestinians, reelecting Donald Trump, and rejecting even the most minimal steps to stop the climate crisis. The media narratives are shifting as the punditry is scrambling to make sense of inflation during the COVID-19 pandemic and the rise of right-wing authoritarianism. The situation looks grim, yet a crisis is also an opportunity, however partial, to intervene into the permanently unstable ground of our global economy.

This is perhaps the critical edge of Marxian analysis, which has historically made light of capitalism’s spectacular failures and horrendous successes. As of late, and thanks to the rightward lurch of global politics, the nation-state has made a surprising comeback. Many are ringing the bell for nationalist protectionism and an end to globalization.¹ For instance, some have asked if capitalism was killed and usurped by a new era of technofeudalism, Anton Jäger has suggested the concept of “hyperpolitics” to periodize the decline of US empire, and Robert Brenner and Dylan Riley have argued for the concept of “political capitalism” to understand our trying times.² While diverging on a number of points, it seems plenty clear from the literature that the state and nationalism figure prominently in today’s political landscape. With that, if we are to historicize this period adequately, it seems prudent to evaluate how Marxists theorize the state along with how they should relate to the national question.

Two recently published texts responding to the crisis that capitalist society finds itself in offer illuminating analyses for those considering the national question today. The first, an English translation of Wolfgang Streeck’s 2021 work Taking Back Control? (Zwischen Globalismus und Demokratie), mounts a study of the ways that globalism has closed off the possibility for democracy and what can be done to restore democratic control of the economy to the general populace in the twenty-first century. The second, the debut monograph from Jamie Merchant entitled Endgame, scrutinizes global economic decline and the emergence of what he calls “economic nationalism” through a Marxian lens.

These texts both analyze the majority of what some call the advanced capitalist countries—the United States, the United Kingdom, the European Union, Japan, and China—while also suggesting how economic decline breeds right-wing revolt. While both operate on distinct theoretical terrains—with Streeck showing his heritage in John Maynard Keynes and Karl Polanyi, while Merchant adheres to a communist horizon—their works offer moments of complementary analysis and points for further debate for careful readers.³ The underlying question for both Streeck and Merchant is whether nationalism and the nation-state can be a vehicle for radical change today. This is an old question for the left, to which Streeck and Merchant offer competing answers. In the following, I offer a comparative and dynamic analysis of the argumentative lines of Taking Back Control and Endgame to, perhaps, think more dialectically about nationalism in the twenty-first century. My resulting argument is that the nation-state is an inadequate institution to solve the problems of global-economic decline. While nationalist rhetoric and appeals appear like a guiding light under the long shadow cast by globalization, such political imaginaries share liberalism’s fantasies of a rationalized world.

The rest of this review essay is organized into three sections. The first will turn to the parts or these works that analyze the conditions of capitalist accumulation in order to understand their theorization of capitalist society and the decline of globalization. The second section will then turn to their responses to this decline and elucidate their treatment of the national question within the conditions of the twenty-first century. By way of conclusion, the third section then points toward further considerations regarding the role of nationalism today.

Falling Globe, Rising Nation

Streeck and Merchant both diagnose the advanced capitalist countries’ decline in profitability and consequent decline in investment in productive labor. In the hopes of reviving these declining rates of return, a glut of speculative investments have cropped up that have shielded money from democratic control and indirectly propped up the global market.⁴ The two authors begin to diverge in their explanations of the consequences of these interlocking phenomena. For Streeck, showing his intellectual heritage from Karl Polanyi and John Maynard Keynes, the decline in profitability results in an unequal distribution of incomes and wealth which makes consumption of goods—and, therefore, the renewal of the system—nearly impossible.⁵ For Streeck, finance capital (or neoliberalism) “has left behind massive piles of public debt and a bloated global money supply,” which leaves large swaths of money across the world in limbo, looking for a place to be reinvested profitably.⁶ This only reinforces the unequal distribution of wealth, compelling the further centralization of industry into the hands of the few. Since money is not subject to any kind of democratic decision-making, this amounts to another way in which the capitalist system dictates the general direction of national economies in the service of the capitalist class.

Streeck extends this explanation to the political consequences of the declining profit rate by noting the right wing’s response to this receding democratic control over the economy through a rising authoritarianism. He historicizes the neoliberal counterrevolution and globalization, noting that nation-states have seen exceptional population growth, dependency on global value-chains, and financial imperialism abroad due to the increasingly unregulated financial sector. In contrast to the prevailing understanding of neoliberalism, these tendencies have led to the increasing use of the state to manage these developments. Streeck calls this authoritarian response mega-statism (Großstaateri), which he understands as the consequence of relinquishing control of national economies over to the invisible hand of the global free market. So, rather than a way to shrink the nation-state, neoliberal globalization was in fact a way for nation-states to find new avenues for competitive advantage for their own firms while aligning state capacities to protect these avenues at all costs. Yet he is clear in saying that “[t]he abolition of statehood in favour of technocracy or rule by the market…was never a real possibility” as it was always a myth in order to concretize US financial imperialism and hegemony.⁷ According to Streeck, this contradictory dynamic makes the nation-state, as it is presently organized, an unwieldy institutional lever by which to govern society.

…the crux of the disagreement between Streeck and Merchant is the latter’s understanding of the nation-state as determined by capitalism’s global relations of production in contrast to the former’s view of the nation state’s relative autonomy from those global relations under particular conditions.

Streeck uses the COVID crisis as an example, arguing that “the facilitation of cross-border capitalist expansion, does not permit a realistic calculation or efficient allocation of the costs of globalisation, and thereby condemns the global regime to structural impossibility.”⁸ In short, the problem today lies in the fact that nations are too big to be governed and cannot be held accountable to maintaining the speculative promises of a global economy for society at large. Therefore, nation-states fail to keep the unfettered, undemocratic capitalist world-system in check. It is for these reasons that he advocates for a return to small-statism, to focus on national concerns and bring the capitalist economy under democratic control.⁹ As he argues, the nation-state is “the only institution capable of asserting the primacy of politics over the economy, or, indeed, the political primacy of society over capitalism in the face of hyperglobalization.”¹⁰

Merchant, on the other hand, finds Streeck’s dream of subsuming the economic to the political a convenient fantasy. Merchant’s retention of the concept of totality—which Chris O’Kane defines as “a theory that grasps history and/or capitalist society as an interconnected whole from an emancipatory perspective”—renders his approach to the rate of profit unique.¹¹ Rather than demarcating the political and economic as two separate spheres of influence in social life, Merchant instead insists on their fundamental relationship within capitalist society as a totality. Consequently, for Merchant, the rise of right-wing politics is not a symptom of the failure to wield political power over capitalism, but of the breakdown tendencies of the totality of capitalism as experienced within given nation states. Merchant asserts that the decline in the rate of profit is not the cause of bad governance. Nor is it caused by a leech-like financial sector sapping the profits of industry or a dominant national economy outcompeting the rest of the world. Instead, Merchant shows a decline in investment in productive activities (that is, those activities where labor creates surplus-value) across the world capitalist system since the 1970s. Investments in production in the advanced capitalist countries are becoming increasingly unprofitable which makes firms race to the bottom, scouring the planet for the cheapest labor (disproportionately in the Global South) while relying on subcontractors to foot the costs of producing goods or processing natural resources.¹² Further division and specialization of firms delays capitalism’s inevitable collapse and temporarily raises specific states’ (and their domestic industries’) competitive advantages and rates of profit.

Yet, as gains in productivity become generalized across the board, growth begins to dwindle again and, with it, the world-capitalist system. The United States, rather than protecting the system with which it has achieved world hegemony, “is now the principal country disintegrating it, enacting protectionist policies whose most important effect will not be to revive the US economy, much less the world’s, but to set off a ruinous arms race of competing regimes around the world.”¹³

By finding the source of economic decline and the political turn to protectionist policies within capitalism’s relations of production, Merchant can explain the contemporary rise in nationalism. Merchant argues that, as economic “growth dissipates, mass frustration spreads, and ever more people hold politicians—as those who are supposed to be able to do something about it—in utter contempt,” tantalizing narratives of right-wing populists, fascists, and authoritarians like Trump become all the more persuasive.¹⁴ This is where Merchant’s concept of “economic nationalism” allows him to explore how various pundits, politicians, and ideologues are now receding into the borders of their nationalities to emphasize “the need to protect ‘our’ economy, assets, or property from unfair competition or foreign ownership.” In this way Merchant offers the strongest explanation and criticism of the rise nationalist rhetoric of all political flavors by situating it within the decline of US empire and the transnational movement of global capitalism.¹⁵

At its core, economic nationalism claims “that the wealth generated inside a country belongs solely to its legal citizens, and that economic policy should reflect that. It opposes globalism and advocates more domestic control over the economy, locating the essence of democracy in national sovereignty.”¹⁶ With both left-wing and right-wing versions of this core ideology calling to decouple from the global economy, economic nationalism may seem like the only response to liberalism’s epic failures. This focus on the nation allows capitalists to use foreign threats to align state capacities toward nationalistic ends in order to protect “the basis for the rule of the bourgeois class.” “National governments enthusiastically comply” to these measures, “since their existence is inextricably tied to the health and vigor of their domestic capitalist class.”¹⁷ By pursuing partial solutions to problems that economic nationalism cannot solve, the nation-state is weaponized by the capitalist class in an effort to stabilize what will always be an unstable social and economic system. Seeing no exit, capitalists are now concerned with protecting what little they have and using the state as a strong arm to direct investment and state policies to protect their class position at all costs. This response shows the general indifference of the capitalist system to the rest of the world; capitalism is not only unable to resolve social contradictions, but is now being used in a way that actively deepens them.

Merchant emphasizes the permanent crisis conditions of capitalism and argues that economic nationalism, as a political response, simply prolongs its demise—providing neither a full, nor partial solution to the transnational problem of capitalist accumulation. For Merchant, the return to nationalism is a reactionary project caught up in the fantasy of technocratic control over an uncontrollable economy. “The capitalist world system” as Merchant explains, “is like a circular firing squad in which the pursuit of productivity by all participants results in general desolation for them all.”¹⁸ Against these warnings, Streeck offers a narrative of neoliberalism which focuses on the growing imbalance in decision-making and control of the world’s money supply which causes discontent with politicians, fueling the far right’s ascendancy, and the capitalist system’s ungovernability. Streeck maintains that the nation-state is the only means of returning democratic control over the economy and rationally organizing it. In this sense Streeck maintains faith in the nation-state as an actor to control capitalism’s excesses. Thus, the crux of the disagreement between Streeck and Merchant is the latter’s understanding of the nation-state as determined by capitalism’s global relations of production in contrast to the former’s view of the nation state’s relative autonomy from those global relations under particular conditions.

Question the Answer?

If one were to understand the state as an agent in history, it can be reasonable to comprehend the last fifty years as capitalism’s whittling away of state capacities to act on behalf of the majority of humanity. To reassert the state over and above the market is an understandable response after decades of austerity and the dubious increases in worker productivity as wages stagnate.

Streeck’s work is illustrative here since he provides a strong rationale for what he calls a “downward exit from the post-neoliberal stalemate” in order to reassert the political over the irrational economic sphere.¹⁹ Importantly, in Streeck’s imagination, it would require a heavily regulated financial sector with strict controls on the movement of capital between nation-states while also fixing tax codes to account for asset inflation and inheritances so as to curb wealth inequality.²⁰ This requires that the prevailing megastates of neoliberalism be encouraged to produce for their own local context rather than for export markets which he asserts is the only way to achieve a robust social safety net protected from the vultures of finance.²¹ As the title of his work (Taking Back Control) suggests, Streeck is by and large more optimistic that nonimperialist small-statism is capable of taking back control of the market and reigning in the excesses of capitalist growth. This would grant agency to the state to overrule the imbalance of decision-making power in the present economy by affirming democracy as the pillar of society.

Merchant shows that MMT’s claims that the state can fund the public projects and social programs crumbling in the wake of neoliberalism ultimately rely upon the same ideological pretenses of Keynesian theory, which holds that “governments…are capable of dissolving social conflicts through the scientific rule of a techno-philosophical elite, who see through the clash of competing interests to govern in the general interest.”

Again, in the context of global economic turmoil in the wake of COVID-19, it would seem prudent to withdraw from international interdependencies and consider how conscious economic organization and cooperation can remake society along more just and equal lines by directing production for national aims. While these prospects seem promising for weary and tired leftists, there are some counterrevolutionary tendencies that we can glean from Streeck’s proposals that are representative of the wider turn to nationalist politics. Even though Streeck affirms his work on the grounds of political theory, he vacates a political understanding of nationalism early on in his work saying that he uses it as “a neutral characterisation of a mode of political action based on the nation-state and in pursuit of the collective interests it stands for, which may (but need not) be associated with international aggressiveness or disparagement of other nations on racist or other grounds.”²² Considering its history, nationalism is always an assertion of a distinct people against some other, and the nation is the protection and legal fortification of a particular people’s call for self-determination against that other.²³ From Streeck’s vantage, the problem of the return to nationalism becomes a problem of authoritarians who want to use it for exclusionary and racist projects. If the right group could use the nation for the collective interests of everyone, then maybe the nation-state might be wielded for truly democratic and socialist ends.²⁴ Or at least that is Streeck’s hope.

Merchant throws cold water on the economic realities of a downward exit by showing the imbrication of global decline and national decline. In particular, his chapters on imperialism and Modern Monetary Theory are tours through the left’s attempts to respond to global decline through appeals to national sovereignty and the power of the state to regulate the economy. The critique of imperialism is particularly important here, since a downward exit as imagined by Streeck would require that countries maintain small-statehoods that are somehow cooperative and nonimperialist. This is only possible since Streeck defines imperialism (an economic phenomenon), in political terms as the product of the drive for power by authoritarian figures. As Merchant points out, these figures would pursue power simply “for the sake of getting more power”—a tautology of epic proportions.²⁵ Rooting imperialism as the effect of political choices is dubious considering that capitalism effectuates its own form of impersonal power behind the backs of producers, driving them outward and into imperialistic expansion. That is, an appropriate understanding of the relationship between imperialism and capitalism entails a view of imperialism as a systemic, rather than personal, feature of the world system.

By showing how overproduction is a constant feature of a society in which declining profit rates shape global competition, Merchant is able to situate imperialism as “just business as usual in the capitalist world economy.”²⁶ In his account, overproduction is a feature of a society of producers who independently produce their goods, yet are reliant upon commodity exchange to organize the production of these goods.²⁷ Instability is the defining characteristic of capitalism, and it is imperialism that ensures capitalism can reproduce itself on an ever-expanding scale to absorb the surplus product. To this day, capitalism’s drive for profit remains the same; it requires that nation-states, because they rely on the capitalist class for their own existence, pursue imperialist aims in order to reproduce society.²⁸ In this way, imperialism is not something that can be waved away through savvy politics; it is a structural feature of capitalist society and consequently leads to the accumulation of wealth by the few at the expense of the many. To argue that we can reach some nonimperial capitalist consensus with democracy is virtually impossible.

So with that, and in what is probably one of the best texts on Modern Monetary Theory (MMT) from a Marxian perspective, Merchant persuasively turns to criticizing a recent Post-Keynesian craze that would theoretically allow economists to circumvent the need for imperialist growth by leveraging a nation’s national debt to fund itself. According to its proponents, MMT is a reversal of economic orthodoxy that puts the state in the driver seat of the economy, allowing it to take control of capitalism through thrifty spending and taxation, as Stephanie Kelton argues.²⁹ Rather than the typical barter myth, which is used to explain the necessity of money to facilitate the exchange of goods, MMT posits that money originates in the nation-state’s ability to tax, thus positioning the nation-state as a central actor that stands over and above the economy. In other words, MMT imagines the state as a relatively autonomous actor which can intervene in strategic ways to balance the economy by buying and selling treasury bonds in order to keep inflation down and employment rates high. Positioning the state in such a way would unleash it from its current marginal role in managing monetary policy by adjusting interest rates to curb the consumption of its residents. By giving the state more tools, MMT conceptualizes the state into a powerful tool for economists to rationalize the irrational market.³⁰ Central to MMT is its claim to obviate the need for countries with sovereign currencies to experience the worst of boom-and-bust cycles typical of capitalism since the state is able to intervene in a much more active way by minimizing financial risk and funding social programs to protect a state’s people.

Merchant shows that MMT’s claims that the state can fund the public projects and social programs crumbling in the wake of neoliberalism ultimately rely upon the same ideological pretenses of Keynesian theory, which holds that “governments…are capable of dissolving social conflicts through the scientific rule of a techno-philosophical elite, who see through the clash of competing interests to govern in the general interest.”³¹

According to Merchant, MMT obscures the state’s role in shoring up capitalism as a transnational system, and the class structure necessary to support it.³² Merchant argues that this occlusion has its origins in money’s fetish character. Following Marx, money is a means to represent equal amounts of human labor by measuring time, which consequently obscures the concrete characteristics of human labor. Without money, it is much more difficult to equate the labor of a schoolteacher and the labor of a construction worker, as their labor is qualitatively different. In abstracting from labor’s concrete characteristics and treating them as equal amounts of “human labor,” money can take on a life of its own by appearing valuable in and for itself, making its “alienated form of power” all the more real as “relationships between human beings that take on an impersonal existence independent of its creators and in turn dominate them.”³³

Unity might be appealing under the guise of national interests, but, as Vladimir Lenin adamantly held, the horizon for Marxists needs to be international solidarity among proletarians.

This last point is what is uniquely important for Merchant’s argument: money’s fetish character escapes the conscious intentions of politicians and economists.³⁴ It drives home the central contradiction at the heart of the US capitalist state, which is at once posited as governing in the interests of a given populace and at the same time defending its currency as the universal means of exchange. Humans are dominated by what we do in order to survive under capitalism, and the same is true for governments like the United States’s, which are compelled to bend to the international pressures of the global-capitalist system at the expense of everyone. According to Merchant, MMT’s attempt to fix a transnational problem with national monetary policy is not possible since “the ‘monetary sovereign’ does not fully control its own currency as world money, but remains subordinated to it and condemned to serve its own creation.”³⁵ By presenting the impersonal compulsions underlying the money-form, Merchant is able to show how attempts to resolve the issue of the declining agency of the state to improve the lives of workers only prolongs its inevitable collapse. In doing so, he gives the lie to Streeck’s dreams.

Merchant’s criticism of “economic nationalism” in both its left and right varieties begs the question as to what he proposes as a solution. The last chapter of his work sketches three terrains of class struggle and how they confront capitalism in what he calls “the Stage, the Shop, and the Street.”³⁶ It is here that Merchant opens new questions about the possible terrains on which class struggle is waged while resisting definitive answers to the problems of resurgent national movements and economic decline. One might say that this sidesteps the necessary task of thinking ahead in concrete, actionable steps given that, more than ever, we need analyses of organizing capacities. However, I would argue that it is precisely this analysis that Merchant provides here. Instead of prescribing, Merchant leaves open the possibility of multiple fronts, which, from electoral runs to labor organizing to insurrectionary protests, have all recently demonstrated their capacity to make capitalists shiver in fear.

Of and For Conflict

Respectively, and in their own way, Merchant and Streeck ask readers to consider capitalism’s crisis conditions and, importantly, be ready to take advantage of them. Endgame provides readers with a critical gaze with which to cast upon the totality, showcasing the enduring clarity of Marxian theory and its ability to pierce through our ideological veils to open up the possibility for new struggles. Taking Back Control, offers a controversial rationale to turn back to the nation-state as a space for political organization after decades of neoliberal globalization. Where Streeck finds an answer, Merchant finds an impossibility premised on a misreading of the space afforded states within the totality of capitalism.

Unity might be appealing under the guise of national interests, but, as Vladimir Lenin adamantly held, the horizon for Marxists needs to be international solidarity among proletarians.³⁷ Given Merchant’s own astute analysis of economic nationalism, it is less certain than Streeck that he can theorize and adequately answer whether the left needs to organize around national interests today at the level of abstraction at which his analysis is pitched. To properly answer this question, we should imagine going to local struggles to organize where the possibilities for radical change are more concrete and tied to conditions of social reproduction. For instance, the Gaza solidarity encampments last year in the United States and across the world are one recent way in which support for national sovereignty opened the possibility for international solidarity. The calls for university divestment and the rising awareness of these institutions’ complicity in Israel’s genocide in Gaza displayed the contradictory positions of capitalism and nation-states to democratically govern in the service of people when in fact they are subservient to the demands of US weapon manufactures itching to sell their missiles and border surveillance technologies. The work of illuminating the contradictory positions of the world-system is exactly why the Palestinian struggle is an international cause of utmost importance; Palestinian resistance and solidarity illustrates the many ways in which the capitalist world-system is blindly driven by the pursuit of profit above humanity.

Until then, the Marxian left would do well resisting the temptation of organizing along national lines to confront capitalism until we can definitively answer how, in this moment of resurgent right-wing nationalism and authoritarianism, it can or will lead to international unity among proletarians. The right’s discursive dominance over nationalism suggests the need for more analysis that measures organizational capacities in the local context. Only such an analysis can determine whether this is a battle worth fighting. The pragmatism of the capitalist system and its ideologues lies in the very fact that it could care less if nations exist or not; it will align itself with whoever or whatever will keep it floating along. If one is going to pursue the national line, they will need to confront the contradictions of capitalist consciousness within the specific economic conditions that states beholden to local capitals find themselves in during the twenty-first century. Otherwise, the nation becomes primed for the sort of counterrevolutionary efforts of the capitalist class and for falling back into doing little more than clearing the way for generalized commodity production.³⁸

Perhaps instead of seeing the nation as an endpoint of organizing in the case of drumming up national unity, the left should recognize the nation as a space confronted with historically specific problems that can serve the means of organizing against capitalism on an international scale. Just because the nation is what we have today, we do not have to accept its vision for the future. We can, however, take advantage of the way the nation unites people along shared negative experiences of it and its capitalist projects, uniting across these differences. Suffering in different ways under capital-driven nation-states points to the shared reality of the nation as often merely a vehicle for capitalist growth. Drawing forth these contradictions keeps the possibilities of international solidarity open, while acknowledging how each nation is presented with real historical problems.

If one looks at the uniquely American experience with healthcare services, it is easy to see how the United States, as a nation, presents a negative determination of its residents by making medical services available for only those who can pay. If the murder of United Healthcare CEO Brian Thompson has said anything about the US healthcare system, it is the fact that the majority of people see through the veil of insurance, including federally subsidized marketplaces for insurance, and know that they want something else. Thompson’s murder brought to the surface the barbarous, impersonal qualities of insurance companies as they subject human lives to ever more misery while they chase around wads of blood-soaked cash. Whether a sustaining fight will emerge is another question, but it is a reminder of the fissure points and fragility of the nation-state and its mythos. As more contradictions of the nation are cast out of the shadows, revolutionary fervor will surely build up and become the basis for something otherwise.

Anti-capitalism, Imperialism, Nationalism, Political economy, State

Jacob Wilson

Jacob Spenser Wilson is a PhD candidate at the University of Washington. He writes about the political ecology of the far-right, the critique of political economy, and the rhetoric of money.

Nationalism and Capitalism’s Ever-Spiraling Crisis

Review of Streeck's Taking Back Control and Merchant's Endgame

Jacob Wilson

Falling Globe, Rising Nation

Question the Answer?

Of and For Conflict

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