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The Lie of the Weak State

The good condition of German labor markets is in reality in a catastrophic state. Unemployment is an "act of violence" against every individual unemployed person. At the same time unemployment represents an enormous waste for society as a whole. From 2001 to 2013, mass unemployment in Germany entailed almost a trillion Euros in fiscal costs. These costs contrast with zero benefits.

By Heinz-J. Bontrup

[This article published in: Frankfurter Rundschau on April 17, 2015 is translated from the German on the Internet.]

Whoever speaks and writes about human work should not forget the unemployed who have no work and whose working hours are involuntarily set at zero by the capitalist system. He or she should not talk drivel about more working hours flexibility of employees for compatibility of family and occupation or even about a skilled worker shortage.

Owners of capital are the only profiteers of an even greater commodification of the workforce. The good condition of German labor markets as claimed by neoliberal demagogues is in a catastrophic state in reality. Gainful work counted in "heads" has increased and unemployment has decreased. But at what price\? The work volumes (employees multiplied by the respective working hours) have fallen because the part-time rate rose from 17.9 percent in 1991 to nearly 40 percent.

In 2014 around 8 million dependent employees only had 15 hours of work per week and millions of precarious job conditions have arisen from which people cannot live and die. Labor markets largely deregulated by the dominant politics did not exist after the Second World War. Never was it so easy for businesspersons and managers to discipline employees and the unemployed and force down work pay on the background of the existing mass unemployment.

For a long while, unions have not been able to generate possibilities within the overall economic value-creation - let alone realize higher real incomes above the productivity rates with a redistribution effect benefiting the wage rate. Rather they must beg for legal minimum wages from our "people's representatives" in one of the most productive and innovative countries of the earth.

Mass unemployment has now ruled in Germany for 40 years. What a system- and political failure! Only the Alternative Economic Policy study group has criticized this again and again and showed possible counter-measures since its founding in 1975.

Unemployment is an "act of violence" against eve4ry individual unemployed person, as the sociologist Oskar Negt rightly declared. At the same time unemployment implies an enormous waste for society as a whole. From 2001 to 2013, mass unemployment in Germany entailed almost a trillion Euros in fiscal costs, the Institute for Labor Market- and Occupational Research calculates. These costs contrast with zero benefits.

Since the German reunification, we could have eliminated unemployment as in the 1960s. The disastrous consequences are manifest in a society that is not a full employment society or "lives" with mass unemployment. Whoever believes removing the "scourge" unemployment is now possible with a growth driven by the market and competition that tremendously damages the environment and makes more and more persons sick in the work processes has understood nothing about the economy.

The economic growth will not be sufficient even under the demographically declining future work possibilities. For decades, the total economic productivity rates were larger than the growth rates of the gross domestic product corrected for inflation. So the work volume declines. That will also be the trend in the future.

Therefore there is only one solution - a collective reduction of working hours toward a 30-hour week, a shorter full-time for everyone - with full wage compensation. The productivity growth enables its financing.

Reduced working hours is neutral regarding piece-labor costs, inflation and distribution. Thus the international competitiveness of businesses is not threatened. What is advantageous from the view of businesspersons and owners of capital is that their profits also rise under the conditions of reduced `working hours with full wage remuneration. Everyone is a winner - thanks to rising productivity rates.


By Heinz-J. Bontrup

[This article published in: The European, October 1, 2014 is translated from the German on the Internet.]

The state in democracies is not neutral or interest-free`. The state is always oriented in interests and interests are brought into the parliament by parties. In the legislature, the respective political majority can realize its party interests through laws. Outside the parliament, lobbyists constantly try to influence elected politicians and their parties and to enforce their particular interests.

In every society, the state is a superstructure and the private economy is the base. The state depends on the economic development. If the economy runs well, the state amasses much revenue and can draft policy.

If the economy runs miserably, the state sector is also in a fix. It must cut back its spending or act in an anti-cyclical way with its spending and become indebted.

Every economist knows the state savings-paradox when the state in a situation of economic crisis tries to revitalize its budget through an austerity policy. The state then aggravates the economic crisis and at the end has more debts, not less debts. A misguided state action can even destroy political democracy as the collapse of the Weimar Republic demonstrated.

Whether the state is ultimately "weak" or "strong" in the context of the economy, whether a low or high state share is socially carried out depends exclusively on the interests of the respective governing party. Here there are two fundamental directions. One is the neoliberal doctrine unilaterally satisfying the capital interests that desire a "trim" state and a rule of the "self-regulating markets" joined with a high privatization degree. The second is a Keynesian state intervening in the economy to satisfy the broad masses and dependent employees which also moves the social and the public into the center of its economic policy.

Rightwing-liberal parties stand unrestrictedly for the first doctrine and in a weakened form social democratic and ecological parties. Only leftist parties support a welfare state-Keynesian policy. Both political-economic "state doctrines" redistribute the value-creation created in society in division of labor.

In the primary market distribution, neoliberals rely on low wages or work income and in the secondary state distribution on low profit- and wealth taxes and on the most complete deregulation of the labor markets. Keynesians intend the opposite. Since the middle of the 1970s, neoliberals have clearly carried out their ideas in politics and the economy.

The state still has a strong power position unlike the thesis believed by many that the state is weak today and can only act in "small steps" or incrementally and pamper or lead its citizens by the nose with trivialities. This is also true in an intensely globalized world. This depends on the respective dominant political interest position.

A neoliberal-oriented state suggests to us its homemade powerlessness. Thus it is also understandable that most people after forty years of neoliberal policy only see the state or politics as impotent and as a result turn away weary of politics. The low voter turnouts prove this.

The most massive state intervention at the peak of the 2009/2010 world economic crisis shows how strong the state can be politically-economically when the whole is at stake, maintaining the dominant capitalist-free enterprise system. The neoliberal ruling elites and causal agents of the crisis denied their market-fundamentalist doctrine in the short-term that nothing can be done to combat crises and drafted credit-financed economic programs never practiced before in the history of humanity. The state central banks also lowered their key interests to nearly zero.

However the pure state of interests was manifest after combating the acute crisis. Only an orderly distribution of the accumulating crisis burdens is emphasized ex post by the neoliberal political representatives. State indebtedness hugely expanded in the crisis that largely safeguarded the jobs of dependent employees and the capital of the wealthy and should now be reduced through state austerity programs.

A "state debt crisis" cannot be allowed. That rings from nearly every mouth. Massive "savings" are necessary in the state sector. The financiers of reducing state indebtedness for the neoliberal ruling elites are certain: the employees in public service, the long under-financed public infrastructure, the completely neglected education sector and the socially weak who depend on a powerful social state must tighten their belts. On the other hand, higher taxes for high-income and high-wealth strata do not correspond to the thinking of a "weak" neoliberal state.


Joseph Stiglitz, "Rewriting the Rules of the American Economy. An Agenda for Growth and Shared Prosperity, " May 2015, The Roosevelt Institute, 115 pp

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