Abstract
Sylvia Walby’s Crisis is a sign of our precarious times. It is a call on sociology to change, so that it can address a global crisis that may be evolving into a threat to democracy. Driven by a global tide of neoliberalist government from the 1980s onward, the book argues, a social crisis has emerged. This crisis has cascaded from one social realm to another – from finance to production, to state welfare, to party politics, to supra-national political institutions. To study the origins, effects, and potential futures of the crisis, we need to see society as “a whole”. We need to expand our theory repertoire beyond the traditional boundaries of sociology, to see finance and production, as well as labor, politics, and gender, for what they really are – as variously interdependent, and sometimes unstable, social systems.
Walby uses concepts from economics and complexity (systems) theory, as well as sociology (feminist theory and social constructionism), to explain how the crisis has cascaded across social realms. It started as a financial crisis in 2007–2009, caused by the deregulation of finance, which was a part of the neoliberal government program that spread globally in the 1980s and onwards. Based on the assumption that free markets are efficient and self-regulating, it was held that unregulated financial markets would deliver capital to production more efficiently than if distorted by state control. Restrictions on capital flows between states were abolished, as were restrictions on merging retail and “casino” banking, and so on. For Walby, the deregulation program was a democratic failure; it ignored the lessons of the 1929 Wall Street Crash that led to extensive state control of finance in the first place. Building on Minsky, Stiglitz, and like-minded economists who imply that states need to contain the propensity of finance to generate instability, Walby explains how the deregulated financial markets of the 1980s and onward moved toward instability. Finance became a separate social realm; innovations such as “shadow banking” and “offshoring” removed it further from state control, and finance began to penetrate production and dominate it rather than serving it (for example, investors traded production firms to gain investment leverage). Through “positive feedback-loops”, facilitated by “group-think” and “herding” embedded in a “macho monoculture” of risk-taking, financial markets became self-serving, corrupt, and unstable. By 2007 “the social system” of finance had reached a “tipping point” – relatively small events, such as the downfall of Lehman Brothers, could spur a systemic crisis. As complexity theory posits, Walby explains, such “lack of proportionality between cause and consequence” (p. 14) is a defining feature of a social crisis – when social systems become unstable, seemingly small events can have major, even catastrophic, consequences for the entire system.
Walby emphasizes that the social construction of shared meanings shapes how crises evolve. A crisis is “real” in the sense that it represents “actual changes in social processes” (p. 14), but its effects on society depend on how it is interpreted. Shared meanings attached to crises are malleable and contested; the identification of cause and blame is shaped by power moves and contestation (a prominent theme in my own work on the crisis in Iceland; Bernburg, 2016). Thus, when the crisis cascaded into production, causing troubles for state budgets, the neoliberal doctrine led governments to focus on fiscal crisis instead of financial crisis. So instead of regulating and taxing finance, governments have implemented austerity, cutting public expenditure and privatizing public services. Walby argues that if the causes of the financial crisis were gendered, so are the consequences; the production recession initially harmed men, but austerity disproportionally impacts women.
Ironically, then, while democratic failure caused the crisis, the neoliberal framing of it weakens democracy. Which brings us to the current political crisis: in times of crisis and rapid change, established political parties are often slow to adjust, creating opportunities for new political agendas. The crisis undermined the legitimacy of governments and established parties, spurring social protest; populist parties have been rising and Europe’s political integration project (the European Union) has suffered a set-back. Walby warns that this political crisis may be exacerbated in the next round of financial, production, and fiscal crises, possibly leading to a democratic crisis; that is, the political system may become unable to address people’s concerns and channel fundamental conflicts, which may even lead countries on a path to fascism and war, as happened in Europe during the Great Depression of the 1930s. Walby’s concern thus is that the hegemonic position of the neoliberal paradigm may prevent civil society from taking control of the financial and economic realms even though they have become detached from the rest of society.
But there is an alternative future, says Walby: namely, a grand-scale return to the social democratic project. Democratic states have to regain their dominance of finance; in particular, they need to match finance on the international level by strengthening supra-national political institutions. In Europe this means continuing supra-national political integration via the European Union. Moreover, democracy is not just about procedure (e.g. elections), but about social institutions being governed by “the will of the people”. Democratic states thus need to govern social institutions by implementing principles of social justice (including gender equality) and social investment, instead of privatizing them.
The book’s ambition is inspiring. Bringing in concepts from different disciplines, it offers a vocabulary for a big-picture analysis. The introduction of complexity theory in particular helps to explain how crises striking separate social realms in recent years are in fact linked. Moreover, by underscoring the role of political ideologies and the organizing principles they entail, while warning us about the future, the book encourages its readers to think about their political stands. But the book’s ambition comes at a price, as it sometimes fails to provide a good fit between empirical observations (often based on the experience in the UK) and the broad generalizations implied (seemingly about the West, or at least Europe). The hegemonic position of neoliberalism surely varies between countries; European welfare states have not all responded to the crisis as the UK has done (Schubert et al., 2016).
In conclusion, this inspiring book offers powerful conceptual tools for comparative work on the crisis of our time. Hopefully, sociologists will take on the challenge.