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Work and the Activating State

"Since privatization and modernization may be opposites, discovering the activating state is more important than ever. A new definition of work, namely of public charitable activities inside and outside the governmental sector is possible." Ulrich Beck is a professor of sociology in Munich
and author of "The Risk Society" and "Globalization".
Work and the Activating State

Creating New Jobs Despite Recession and Globalization

By Ulrich Beck

[This article originally published in: DIE ZEIT, 07/2002 is translated from the German on the World Wide Web, www.zeit.de/2002/07/Politik/print_200207_ulrich.beck.html. Ulrich Beck is a professor of sociology at the University of Munich and author of "The Risk Society" and "Globalization"..]

German chancellor Schroder can only win the election campaign under one condition: that he finally recognizes the bitter reality - zero growth of the economy and four million unemployed, takes this reality seriously as a refutation of his policy and finds convincing answers for solving the crisis. In October 1998 chancellor candidate Schroder ousted the Kohl government with a great promise. He would transform the blocked Germany into a reform-friendly Germany and lower the number of unemployed to under three million. Schroder trusted a seeming automatism of unfailing framing conditions, namely constant economic growth, lower birth figures and a stable economic situation in the US.

Schroder's great promise to radically force down mass unemployment is grounded on the apolitical trust in the decline of the birthrate. This may have been very ingenious; weak age groups will inevitably cause the demand for work and thus unemployment figures to shrivel without new jobs and demonstrable economic success.

However when the German chancellor now makes the US recession responsible for his failure and hopes beseechingly for economic growth in the second half of the year, he resembles his predecessor Helmut Kohl. The "waiting out" of unemployment... makes Schroder similar to Kohl.

The decisive question in the election concerns the new jobs. The largest unions of Germany are at the end of their patience and demand wage increases of 6.5 percent. The joy over the Euro has produced the hardly pleasant surprise of increased inflation. Mild inflation may strengthen the determination with which the unions fight for their maximum demands.

Sooner or later, the failure of the Schroder government will be clear in this election campaign year. Unemployment rises because a sound policy for creating new jobs is lacking.

Two questions are raised. Is an exodus or breaking away occurring from familiar premises of the paid work society? Is there a new definition of dignified work in this modern Darwinian world of work?

Whoever promises in an election campaign to have a prescription for full employment lies. Paid work does not run out in the paid work society. However we stand at the end of the full employment society that was elevated to the principle of all policy after the Second World War in European constitutions. Full employment in the classical sense meant normal work. In other words, one learned an occupation and practiced this trade all one's life. If necessary, one or two career changes occurred in a working life. The occupation formed the foundation for material existence. Today we face a very different development. Information technology has revolutionized the classical form of work. The consequence is that work becomes flexible, parceled out in its spatial, temporal and contractual dimensions. Thus there are more and more pseudo-independent 230 Euro-jobs, temporally limited work, work without contracts and work in the gray zone between informal work and unemployment. This is also true for highly trained work and higher incomes. The previous principle according to which all employment rests on relative security and long-term calculability belongs to the past. The risk regime governs in the heart of the paid work society today.

This political economy of uncertainty has a domino effect. What complemented and strengthened in good times - full employment, secure pensions, higher taxable income, possibilities of governmental policy - now endangers. Paid work becomes precarious. The foundations of the welfare state crumble. The normal biography becomes fragile or cracked. Old age poverty is programmed. The empty treasuries of the communes are no longer equal to the rush for income support.

Flexibility is sought by everyone at the moment. In other words, an employer should be able to fire his employees more easily. Flexibility also means redistribution of risks from the state and the economy to individuals. The available jobs become more short-term, more easily terminable or "renewable". Flexibility means: Rejoice, your knowledge and ability are antiquated. No one can tell you what you must learn to be needed in the future!

This is the core of the problem. The "creative destruction of the economy" (Schrumpeter) can be praised, not the destruction of people. Ten million old jobs disappear and twelve million new jobs arise for a statistical gain of two million jobs - possibly distributed beyond national borders. The governments must promote high-grade production with high wages to open life perspectives for people. However the degree of automation of this production is very high on account of high labor costs. We stand in a peculiar dialectic: the higher the labor costs, the more the entrepreneur relies on machines and the fewer people are hired. The entrepreneur is even rewarded by the state. In replacing workers with machines and energy, taxes and social security contributions tend to zero. If he hires people, he is punished by high non-wage labor costs.

Politics faces a dilemma. The budget-minded Stoiber wants to keep alive "dead dogs", traditional branches of industry for the sake of many votes with artificial infusions of subsidies. As one example, the building industry not used to capacity but staffed with too many employees, should get on its feet again with a stimulus program in the billions though increased state expenditures portend the blue letter from Brussels. This is obviously a treadmill. The market - here the construction industry - destroys itself. Politicians must take responsibility for the consequences - unemployment, retraining and voter displeasure.

There is no royal way in the international comparison. More successful countries than Germany have chosen other ways. They agree in the crucial question. They know that paid work is no longer what it was and that its importance for profits fades. In the US and Britain, this dwindling significance means lower real hourly wages. In other countries, income chances decline along with secure employment conditions. In nearly all OECD countries, paid work represents an ever smaller share of national income. Economically the wage level falls and only remains somewhat stable in the US because Americans must work more and more for the same money.

In no democracy of the world do voters choose their collective descent. Otherwise a democratic masochism of come-of-age citizens would be inescapable. We face the challenge of organizing the way into the future technically, economically and humanly. How can a political vision appear where the state, citizens and work harmonize? Here are three theses.

Firstly, many equate modernization with privatization, with the vision of the neoliberal state. After September 11, the motto of neoliberalism, replacing politics and the state with the economy, rapidly lost persuasiveness. A striking example for that is the privatization of air traffic control in the US. Flexible part-time employees assumed this central watchman's office in the system of inner security. Their wage was even lower than the wage of fast-food employees. They only persevere a few hours "training" and on the average don't perform this junk job of junk security longer than six months.

What a sad discovery! America's neoliberal self-image - the stinginess of the state on one side and the trinity of deregulation, liberalization and privatization on the other side - has unfortunately made the country more vulnerable for terrorist attacks. In this sense, the terrible pictures of New York contained this coded message. A country can neoliberalize itself to death. In the meantime, the air traffic control has been nationalized and raised to a public service.

The call for a return of the state is also increasingly loud in Europe, not only in America. Britain experienced a disaster with the privatized railroad. Since privatization and modernization may be opposites, discovering the activating state is more important than ever. A new definition of work, namely of public non-profit activities inside and outside the governmental sector is possible.

The economically good years 1999 to 2001 should have been used for that activation (which unfortunately hardly happened): a comprehensive reform of taxes, functions and the social state with the clear goal of creating more space for the civil engagement of citizens in the world of work. As the old labor market becomes more problematic, the state must become more creative. What is central is not completely privatizing and thus abolishing the enormous sector of public service. Rather possibilities for social entrepreneurship and creative initiatives from below are crucial. The most important question is: How should training, science and social services be organized for more agility and the self-renewal of public service? The current university reform is an example of radical action contrary to these demands. All in all university reform represents a crime against the spirit.

With all work for the public interest, the principle of civil independence and self-determination must have absolute priority. When a group of people accept public responsibilities in research, environmental protection or renovation of our downtown areas, this can and should be done in an entrepreneurial way. With this kind of civil reform of public service, two flies can be caught with one swat. Firstly, the money spent by the public treasuries will be used more sensibly than for financing unemployment. Secondly, people are helped in the further development of their lives. Through a social activity that is independent, acknowledged and paid, people could enjoy more quality of life.

Whoever seeks to remove mass unemployment - as international comparisons demonstrate - must begin at the lower realm of the social hierarchy. When lower work income follows the price decline of less skilled work, the little ABC or multiplication table of neoliberalism, then mass unemployment can be speedily reduced. The result is that public budgets begin to flourish. Applied to Germany as a world welfare niche, shredder capitalism devours the rule systems of free collective bargaining and the welfare state, causes the collapse of power and living standards and thus endangers the foundations of freedom.

Secondly, we will probably have to face in the future the antithesis "freedom or capitalism", an ironic historical reversal of the old conservative election campaign slogan "freedom instead of socialism". Considering the present job risk, the activating state must readjust equality and freedom. Article 1 of the German constitution declares: "The dignity of the working person is inviolable." Therefore no policy can be called modern that gives free rein to labor-, income-, social and environmental dumping. One answer could be: the fountains of short-term, poorly paid, precarious work, the origins of nearly half of the jobs in the US, will bubble away at last with a clear legal framework. At the same time, the risks with a social policy of basic security (independent of paid work, tax-financed health- and pensions provisions) could be made calculable. A second answer is "economic facelift" for unskilled activities and simple services in the form of a state-subsidized combined wage. Thus work could be organized more attractively on a large-scale for everyone, for businesses and employees...

Freedom and security could be harmonized better... Everywhere the question is posed: How can spontaneity be organized on the labor market? How can wage dumping or parasitic entrepreneurship be prevented? Gerhard Schroder hoped that the decline in the birth rate would slow down unemployment. He erred. The actual decline in the birth rate does not help out of the tight spot.

Thirdly, there are hard economic reasons for immigration. Immigration is a remedy against the threatening aging of German society, a tendency that scares off investors. According to the elementary insight, the desired growth spiral is only possible through open borders, targeted immigration and rejuvenation of the population. According to calculations of UN experts, the German population without immigration will decline from 82 million today to 59 million in the year 2050. The number of employed persons between 15 and 64 will fall 40 percent. Whoever wants to avoid a high percentage of old people, cost explosions, pension collapse and the migration of capital and young trained workers must fight for the opening of borders so that Germans finally open their eyes to their inner globalization.

In other words, modern economic competence includes world openness. If these arguments for more and different work are not convincing, the candidates should develop a very different future vision and couple the possibilities of implantation medicine with the necessities of labor market policy. Then after pre-implantation diagnostics, only children with an integrated job would be allowed.

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