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Neo-liberal Consciousness

Competition is stylized as the highest virtue. The national competition state or competitive corporatism replaces the nation state and the welfare state. "The state and public institutions are no longer only oriented in the politico-economic interests of capital but act themselves like businesses competing with other businesses." This article originally published in Utopie kreativ from the Rosa Luxemburg foundation is translated from the German.
Neoliberal Consciousness

By Harald Werner

[This article orginally published in: Utopie kreativ, 137, March 2002 is translatedfrom the German on the World Wide Web, www.linksnet.de. Harald Werner, b. 1940, is a sociologist who has concentrated on industrial sociology and social psychology.]


The assumption that social inequality is increasing is affirmed in so many opinion polls that one could think a great majority could be mobilized for a new policy of redistribution from top to bottom. Nevertheless considerable doubt persists...

Social justice is often interpreted as competitive justice, not as distributive justice. Competition itself becomes the seemingly incorruptible regulator of the distribution of income and assets.

People succumb to a mystification of their conditions because real conditions have changed so much that the old interpretation models of social justice become unfit for finding the way in the changed reality.

Reports on the Frankfurter and New York stock exchanges come before the weather. These reports are longer. With the same false predictions, these reports had the same importance as the soccer standings.

The causes of this change in understanding social justice must be sought in the upheavals of the economy and industrial relations.

In the earlier social partnership, unions and works' councils could still haggle with businesses over the value of social peace. Today businessmen haggle over the price of their renouncing on trade-conditioned dismissals pr positional closures.

The trade community with management does not only urge acceptance of the economic logic. This community with management demands adoption and active engagement. Other goals are pushed to the background.

The more pride in one's performance is expressed in increased competitiveness, the greater the rank of increased competitiveness in the judgment of all social processes. Increased competitiveness becomes a positive value by which political concepts are measured.

The neo-liberal strategies in the economy and politics gain their plausibility from practical experience and become deeply engrained in everyday consciousness because they have the character of a personal experience.

At the end, neo-liberalism is nothing but a metaphor for an especially coarse variant of market radicalism where participation in mutual downgrading of social standards is stylized as modernization.

Adopting the mentalities and language of economic management has become customary in hospitals, cultural institutions, universities and partly even unions. Its binary logic of buying and selling or profit and loss prevails in social areas that were not originally created to enhance the positional competitiveness of Germany.

The past century has produced two negative visions for the future of modern societies: Orwell's dictatorial surveillance state and Huxley's brave new world in which people are chased from one entertainment to another and amused to death. The second vision seems to become reality.

Achievement occurs when one has success. Whoever has success has also achieved something. The reverse conclusion is that the losers are themselves responsible for their situation.

Competitiveness as a Core Element of the Social Value System

People in Germany have grown accustomed that Schroder's politics of the New Middle defines the term social justice differently today than before the change of government. Hardly anyone is astonished that the economic- and tax-policy strongly resembles its neo-liberal predecessors. Schroder declared: "We will not change everything but will make many things better." That the SPD supporters - apart from Lafontaine - have quickly accustomed themselves to this is astonishing. Even large segments of the unions who were up in arms against neo-liberalism a few years ago have adopted its principles as a modernization concept, not as neo-liberalism. All this could be explained by the continuing effect of the neo-liberal offensive. However upon closer examination the insidious change in consciousness involves practical upheavals more than ideological upheavals.

Everyday thinking follows the concrete upheavals in the world of work and the economic world. A different meaning is given to the social facts and a new content to customary values. For example, hardly anyone denies today that the unequal distribution of incomes and assets drastically increased in the last two decades. Even the Federal republic of Germany doesn't deny this as shown in its poverty- and wealth report. This doesn't mean that the alarming statistics on the increase of poverty or the scandalous growth of income in the billions in society should be judged positively. However they are accepted more strongly than before either as an unavoidable natural phenomenon or as chargeable to the losers of this development themselves. Public displeasure about inequality spreads. Often there is grumbling when social abuse or laziness are thematicized.

When chancellor Schroder initiated a debate on laziness and other leading social democratic politicians reflected loudly about the necessity of inequality, long existing opinions are populistically amplified. Opinion formation is not uppermost. The standards of social justice changed just as inequality in the country deepened in the last decades. This change in social consciousness cannot be explained with factors like the increasing social coldness of society or the tendency of increasing individualization. The lasting effect of neo-liberal ideologies is also an inadequate explanation for the far-reaching alteration of social thinking since ideologies arise in reality, not in heads.

As a footnote, we now seem to experience a certain perfection of the neo-liberal ideology three years after the Kohl era. The Schroder-Blair paper of two years ago was a milestone. The dyed-in-the-wool neo-liberals invented their new social market economy two years after the birth of the new social democracy. Equality of chances was central for Schroder and Blair, no longer equality in outcomes. Erhard's heirs needed two years to configure the slogan "chances for all" out of his maxim "prosperity for all".

Therefore I believe that facts like resignation to social inequality and acceptance of growing poverty on one side and exploding wealth on the other side are consequences of far-reaching changes in everyday life. In discussing the actual changes of reality, one should begin with the changes in the production of social life. According to the spirit of the times, we are living in a fun- or experience society where people live from information, network, put themselves on stage, communicate unrestrictedly and no longer seem to work. Working- and exchange relations, the opposition of interests between labor and capital, play a subordinate role in the media self-image of this society if they play any role at all.

In the old Germany of the seventies, the television showed people in all conceivable situations. Banalization of the intimate reaches all life impulses while the production of material goods is hidden behind stock market prices. The foundations of physical consciousness, value-creating work and the conflict between paid labor and capital disappear from economic life and yield to a general culture of independence and flexible networking of workers. On the other hand, economic questions are probably discussed more than ever.

The paradox can be easily explained since it is owed to the simple fact that economic activity and work activity are reduced to competition. The economy is only interested in the rank in competition as the outcome of a competition counts in the soccer standings, on a tennis court, a track for formula 1 race cars or on a bicycle path.

Whether we describe our actual reality as an information- or knowledge-society, as an experience- or risk-society is contested. In any case, our reality is a competition society. Competition orientation and competitiveness never stood so much in the center of the social value system as today. Politicians, artists, athletes and very undistinguished persons allow themselves everything today. Only losing is forbidden. The end doesn't justify the means. Pure success justifies the means. Success is what counts. Wealth and poverty are no longer measured in the coordinate system of work and justice but are expressions of success and failure.

Cultural change has more to do with the economy than with culture. What is most characteristic in this society is still value-creation. This question may not be answered from abstract economic laws. The concrete ways of realizing value-creation should be the starting-point.

These upheavals are described as a paradigm change although other forms of consciousness and models of social interpretation follow. Subjective moments like changes of values are explained too quickly with other subjective upheavals like individualization, not with the paradigm change in the social economy and the operating system.

Two Moments of Upheaval

Without detailing this paradigm change and giving dates, two closely connected developments are involved in this great upheaval process in the last two decades. The top-priority line of development is the slackening of the capitalist growth dynamic in the middle of the seventies, the growth of over-accumulated (no longer profitable) capital and the intensified struggle between the worldwide economic giants Japan, US and western Europe in the division of limited markets. The second line of development is that technologies arise under the impetus of competition enabling extraordinary competitive advantages to be realized. The development of communication- and information technologies and their rapid integration in the production- and exchange-process was a strategic question.

The starting-point of these upheavals is important. The markets showed satiation tendencies, the growth rates turned out increasingly more modest and the over-accumulated capital that has now become very flexible faced the same utilization problems. Under these technologically new and economically deregulated conditions, value-creation concentrated more strongly on the destruction of rivals. This was the birth-hour of positional war, the national competition state and casino capitalism.

As long as markets can expand and new demand can be opened up, businesses compete with the means of increased productivity and improved quality for the highest possible share in the growing demand. However the customary competition changes into a struggle of hostile brothers as described by Marx when the markets are just as limited as the demand, when work productivity expands faster than sales and when invested and available capital yields less and less profit.

Capital can only be utilized when it devalues and destroys other capital and displaces it from the market. Competition around market shares changes into a destruction competition to which all business decisions are subordinated forcing the whole society in a kind of general mobilization. This situation of a capitalist struggle of repression and conquest that is actually not new has completely new dimensions through the new technologies and the opening of a global competition. The most important dimension is probably the general acceleration and the growing importance of the time-factor.

Since the faster corporations absorb the slower and no longer only the larger the smaller, the struggle of the hostile brothers passed from the position- to the movement war. Mobility, flexibility and gaining a trifling time advantage were decisive factors of the worldwide positional war. That available global capital created entirely new accumulation possibilities was not enough. Supported by the global deregulation, larger and larger shares of capital pressed into investment banking to prey on global markets and branches like swarms of locusts, showering them with investment funds and withdrawing again after siphoning off the profits. This dominance of financial management over real value-creation contributed to industrial relations adjusting to the destruction competition in the real economy and to the convulsions of the financial markets. All social developments after this upheaval adjust quickly or slowly to the new economic situation and produce their own ideological model of explanation.

Competitive Corporatism

In Germany, these changes encountered a developed welfare state, the deeply graduated cooperation of businesses, unions and the state machine described as social partnership, social market economy and later Rhine capitalism. Today after a quarter century since the beginning of this upheaval, little seems changed in the form of social partnership while much has changed in the results. However the appearance deceives since the business conditions and the results have worsened.

The earlier partnership is definitively past where active participation of employees in modernization was exchanged for growing income and social benefits. The change from welfare state to national competition state occurred on the plane of industrial relations as a change from social partnership to competitive corporatism. Corporatism doesn't mean cooperation or collaboration but subordination. What is involved is the subordination of dependent employees under the supposedly common goal of increased competitiveness...

Unions always stood and stand before the same task, casting bridges from appearance to intellectual understanding. Independent of the fact that many answers of the left are invalid or simply forgotten, the practice of competitive corporatism confronts us with the complicated situation that the world of work, company practice and classical conflicts have become different. The more employees are forced to actively participate in reaching competitive goals and the more one's own interests only prevail by bowing to the pressure of increased competition and higher stock prices, the more often necessary thoughts become the basis for interpreting society, developing value judgments and judging performance. Worker consciousness was always marked by contradiction. That the goal of performance is exhausted in wages and nevertheless goes along with a striking performance consciousness relying on the material work goal, quality, usefulness and superior utility is one example.

This contradiction is also true in the competitive community of shareholder capitalism and becomes important for victory over the competition. However completely different economic/ profit performance parameters went beyond the work product and originally belonged to the duties of management: reducing costs, saving labor, increasing capital profitability and identifying with the market- and stock exchange strategy of the corporation. The trimming of businesses, the delegation of entrepreneurial tasks to work groups and involvement of works' councils in converting entrepreneurial goals give the term "worker-entrepreneur" a very practical foundation.

Expansion of the classical work virtues with entrepreneurial thinking inevitably changes in the scale of values. Demands for flexibility, profitability and personal responsibility suddenly press forward in company policy, development of union strategies and judgment of social priorities. The performance consciousness also changed. Everyday consciousness increasingly accepted that the reduction of state social transfer, reduction of corporate taxes or the retreat of entrepreneurs from the parity financing of pensions were indispensable for increasing competitiveness.

All political measures appeal to increased competitiveness. Even the "Alliance for Work" adds "increased competitiveness" to match the times. Current policy would be inconceivable if the competition orientation had not been the decisive virtue in everyday life. Millions of employees in business learned many principles very early as seemingly inevitable survival strategies. Many collaborated in converting these strategies in the course of positional security - socially cushioned but seemingly without alternative.

Operational praxis inevitably leads to adoption of neo-liberal models of explanation. Most who defend their position in the mutual downward competition know about the inconsistency or contradictoriness of this co-management. The unions are still the most decisive opponents of neo-liberal policy. However criticism of neo-liberalism on a meta-plane comes into contradiction with the internal acceptance of these principles. An open opposition to involvement of unions in reducing non-wage labor costs and growing readiness to test everything that restricts the flexibility and mobility of capital occurs.

The Psychology of the Competition Society

In considering different stages of capitalist development from a social-psychological perspective, the virtues, methods and values of economic activity gradually prevail in all areas of social life. The range of this influence was kept within limits as long as the state organizations and public institutions maintained their stubbornness and understood themselves as correctives of economic life.

The transformation of the nation-state and the welfare state into a national competition state results in the absolute synchronization or enforced conformity of public life with the logic of positional competition. The state and public institutions are no longer only oriented in the politico-economic interests of capital but act themselves like businesses competing with other businesses. Corporations concentrate on the core business and throw away research divisions as deadwood while the state withdraws from everything that only entails costs. The sleek business separates itself from services offered at lower prices. The sleek state privatizes its public goods and produces constantly new low-wage areas. Corporations announce mass dismissals to raise market value and states proclaim social cuts to attract investments.

This colonialization of state and public institutions by the logic of shareholder capitalism could be described as turbo-capitalization. Not only the usual adaptation of societies to exploitation needs of national capital is involved. The state and public institutions are transformed into market participants. The social psychology of the competition state can be best compared with the psychological situation of a state in war. As military mobilization brings the virtues of war into the last allotment garden and orients the whole nation on victory, permanent appeal to increased competitiveness causes an alignment of society to the methods of global economic war. The television reports on the stock exchange are staged like progress reports. The position of the D-mark or the Euro compared to the US dollar is regarded as the most powerful symbol about the situation of the nation. Growth rates transform into fateful dates of governments. Measuring the nations in an international comparison by their fighting strength as economic positions has long been the accepted method.

The parallel with the military has its limit insofar as the whole affair is carried out more as a world championship with great entertainment value than a battle around life and death. The whole must be fun. Because both the market value of businesses and the state of currencies are matters of faith, staging strength and confidence of victories gain decisive roles in the economy and politics. People are casual, cool and positive. Whether the methods of show business are drawn in the economy and politics or conversely is hard to say. In any case the borders are blurred in the fun-society. When the stock market boom of the last years was celebrated by shareholders as the great party, the present crash appears like a humorous or witty Ash Wednesday.

How can one resist the exactions of a fun-society that produces more and more injustice, hardship and lack of perspective and allows no space any more for reservations? To aggravate the situation, the staging of the party changes the perception of social distinctions and makes critics into spoilsports or dinosaurs incapable of modernization. Losers are also inevitable where there are winners. Whoever questions this touches the dogma of the most holy competition. This dogma of competition is questioned as the presupposition of prosperity replacing justice with leveling or egalitarianism.

In public consciousness, a circular reasoning is carried out and the existence of degenerate overflowing wealth is declared its cause. Success is raised to the sole standard of performance. Failure, for example unemployment or income poverty, appears as low-performance, not as discrimination or disadvantage. Wealth in contrast, monstrous incomes in billions or even speculative profits are justified by success understood as performance. In the meantime all reserve is abandoned from wealth.

What results for the criticism of current distribution and a new policy of redistribution from top to bottom? Obviously statistics must be published explaining clearly and understandably how far poor and rich drift apart. Doubts are still appropriate. The poverty- and wealth report submitted by the Federal Government of Germany demonstrates how false and alarming conclusions can be drawn from accurate and sobering statistics. No arguments for redistribution can be found as long as poverty is not presented as the prerequisite of wealth and wealth is not unmasked as a causal agent of further poverty.

Reports that merely document poverty or wealth or unite in a documentation are not vital. Distribution reports are necessary revealing the plain facts that wealth is not a result of success and poverty is not a consequence of unfortunate circumstances but begins with deficits designed in the primary distribution. Whoever is neither boundlessly rich nor infinitely poor is seldom touched by the extent of social division as long as he doesn't know the personal consequences of poverty and wealth.

Degenerate wealth is not only a social scandal but is the presupposition for the dominance of the financial markets over the real economy and one of the important driving forces for the seemingly inevitable threat by the global market. Wealth destroys jobs by limiting both productive investments and job-creating demand. Poverty may not cause sympathy but fear of its consequences. Assuming poverty zones can be prevented with low-wage sectors or the so-called second chance is a fatal illusion. Poverty gives rise to very different costs than income support and is paid with diminishing productivity, loss in creative human power and loss of inner and outer security.

The cunning of contradiction can be trusted despite all the mystifications of social processes and all the effectiveness of ideologies. Unveiling the absurd justification ideologies of state wealth could do what statistics frequently cannot do. Several caricatures in the Frankfurter Rundschau can provide more enlightenment than many of its special pages.

The fun society must be encountered with its own means. However nothing will change without ideas. Facts can be true. A joke can make contradictions visible. Still changing reality always begins with changing habitual ways of thinking.

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