Economic Theory by Tomasz Konicz, Stephen Schulmeister and others

INTRODUCTION – ECONOMIC THEORY

By Marc Batko How preposterous to think we can avert the next financial crisis without regulating or shriveling the financial sector, addressing income inequality and radically rethinking the meaning and assumptions of economics? Hans-Jurgen Urban, a German union spokesperson from IG Metal Frankfurt, likens the financial crisis to a tiger breaking from his cage and sees the welfare state and unions as his trainers.

In 2013 economic crisis is marked by systemic and structural contradictions, exploding inequality, ecological overshoot and the erosion of trust, democracy and community.

Trillions were given to Wall Street banks to avert financial collapse on the ground of "too big to fail." Private losses morphed into public losses. Taxpayers shouldered the losses from financial speculation and unbounded deregulation. Government acted as the "errand boy for the banks" (Bill Moyers).

Economic problems are systemic and structural, not psychological and motivational.

Risk-takers and job-creators have been unmasked. Risk-managers turned out to be riskproducers.

The system must be changed because the systrem leads to stagnant wages over 30 years, totally inadequate creation of family-wage jobs paying into social security. Our clientele system confuses public and private, ignores long-term necessities (e.g. universal health care, free or affordable education and rights of nature) in favor of profit maximization and shareholder interests.

We face system (collective and political) problems since lobbyists write legislation, corporations are treated as persons, money is regarded as speech (the disastrous 2010 Supreme Court decision in Citizens United) and investment is confused with speculation.

Financial investment eclipses real economy investment. Wall Street banks spend over $4 billion over 10 years for lobbying and campaign contributions.

The myths of neoliberalism and shareholder value were and are the basis for the 20072008 financial crisis. The myths of the invisible hand (that self-interest leads to the public interest), corporate beneficence, money created out of thin air, the Enron-model, the Apple-Google model of billions in dummy corporations or tax havens, the investorssuing-states model and the myth of nature as a free good, external or sink must be deconstructed and abandoned.

Cooperation and competition are not opposites but depend on one another. Education, health care, air waves, food, housing and information are public and must remain public.

Otherwise they become privileges and we live in a plutocracy or 21st century feudalism.

The time is right for alternative economics, reducing working hours, labor-intensive

investment, person-related work, access not excess and enough not more. Unlike a chair, an idea can be shared by a whole people!

The following articles by Swiss, Austrian and German critical economists could revitalize public debate and understanding. The present system is unsustainable and the future system is still being designed. Radical change is a necessity given the end of cheap oil, climate change and the need to redefine work, security, happiness and health.

Only dead fish swim with the stream. You can make fish soup out of an aquarium but you can't make an aquarium out of fish soup (Polish proverb).

A public debate on job creation, shrinking the financial sector, market failure, motors, models and myths is imperative.

Economics is pluralist and not brainwashing in market radicalism. The myths of the selfhealing/self-correcting market, corporate beneficence and nature as a free good, external and sink must be overcome like the myths of efficient markets, perfect information and speculation as investment. Swiss, Austrian and German economists (e.g. Jens Berger, Johannes Mosmann, Stephen Schulmeister, Ulrich Thielemann, Peter Ulrich and Elmar Altvater) could help us correct the inflation of the financial sector and the myths of trickle-down economics.and financial products. Albert Einstein said the bomb changed everything except the way we think and the one thing we learn from history is that we don't learn from history. As war is too important to be left to the generals, development is too important to be left to Goldman Sachs and the extractors. Businessmen are not the only ones who know about growth and development.

Problems do not disappear when they are ignored. Deregulation is a collective and a political crisis. Language and democracy are endangered when arsonists are called firefighters, when private losses are made into public losses and when crime in the suites is normalized as a business model or practical necessity.

Risk-takers and job-creators turn out to be manipulators and fraudsters while public spirit falls by the wayside.

We are called to be active subjects, not passive objects. Reconciliation means discovering a new unity relativizing differences. As prejudice can be overcome as a stepping stone to the "event of understanding" ("fusion of horizons," Hans Georg Gadamer, Truth and Method), ignorance and poverty can be overcome in structural/systemic change. Partial victories are important since they can be strengthened False diagnoses and false therapies are worthless and only lead to more injustice and concentration of wealth. The banking crisis leading to the financial crisis and the economic crisis is often trivialized as a bump in the road. In late stage capitalism, disconnection is normalized and representatives and those they should represent seem in different worlds. Myths, fairytales, half-truths, fish stories and perverse incentives are involved. Focusing on the myths, motors and models would be very helpful to extricate ourselves from market radicalism.

We face a 30-year crisis, not an "Obama-crisis," fueled by massive tax cuts to the rich (the top tax rate was over 70% from 1938-1982 and was cut to 35% by Reagan), expansion of the financial sector, confusion of speculation and investment, repression of alternatives of environmental caring and qualitative growth and the financialization of politics (where the state is reduced to an errand boy of the banks, cf. Bill Moyers).

Economics is a pluralist enterprise, not a brainwashing or fatalism. Once saving was the elixir and then spending was the elixir (cf. John Maynard Keynes and FDR's job creation, 4 million jobs in two months). Economic problems are endogenous, not exogenous. As wars are too important to be left to the generals, development is too important to be left to Goldman Sachs and the extraction industry.

George Orwell warned that wars would become a domestic necessity to hide or distract from economic contradictions. While productivity has increased for decades, wages have stagnated and workers earn less than in 1980. Tax, investment, labor market, distribution and trade policies must be reexamined.

Businessmen are not the only ones who understand growth and development.

The neoliberal counter-revolution was determined to reverse the New Deal social successes. Think tanks like Americans for Prosperity poured millions into the propaganda effort to decry public education, unions and social security.

According to the neoliberal myth, higher profits would bring more jobs and more investments. In truth higher profits brought speculation in foreign currencies and buying back their own stock. In truth, jobs in education cost 1/10 what jobs in a capital intensive chemical dye plant cost.

The horse must be put in front of the cart. The economy must be seen as part of a larger reality or oikos. Jobs must be created that pay into social security. The interests of the super-rich must not be passed off as the national interest. Private speculative losses must not mutate into public taxpayer losses. The social contract is the alternative to the Hobbesian war of everyone against everyone.

When trust is restored and corporations have responsibilities as well as rights, the deficit will gradually decrease.

The blind trust in efficient markets must be replaced and bankers given a new understanding. Profit making is different than profit maximization. Banking should be a public function, not a casino and the real economy and the environment not abandoned.

Learning from the financial crisis is a sign of historical consciousness. As war is too important to be left to generals, economics is too important to be left to hucksters and financial innovators! Building community centers (as in Vancouver B.C.) could be a “non-monetary� way to public spirit.

Economics should be a pluralist discipline open and welcoming to alternatives and critical perspectives. Being resigned to driving cabs or working at McD is a declaration

of bankruptcy, bitter fruits of a one-dimensional destructive economic theory where capital is granted every freedom and privilege and the short-term is the only term.

Taxation, investment, labor market, trade and distribution policy must be changed to reverse exploding inequality and the new feudalism where speculation is confused with investment, CEOs are called job creators, workers demeaned as cost-factors, risk creators stylized as risk managers and arsonists extolled as firefighters. Closing tax havens would bring $1 trillion in revenues and closing most of the 700 US military bases would make us more secure. Jobs in education cost 1/10 what jobs in capital intensive industries (e.g. chemical dye plants) cost.

In our ambivalent dialectical world (yes and no at once), reality is full of paradox and scandal, exuberance, play and mystery. The time is right for alternative economics, reducing working hours, redefining work, security, strength, health and happiness and soft power!

MARKET-CONFORMING DEMOCRACY

By Jens Berger

[This conversation from 11/8/2013 is translated from the German on the Internet, http://hpd.de/node/17138. Jens Berger, free journalist and political blogger, is an editor of NachDenkSeiten [3] and Spiegelfechters [4]. In this Dresden discussion, he grapples with the questions “What does the world cost?” and “How can we prevent the economization of society?”

The well-known and often accepted pieces of popular or folk wisdom “money rules the world,” “everything is for sale” and “money is power” express what has long been manifest in society. Free enterprise principles and mechanisms spread in all areas of life. Pure economic benefit is in the limelight and simply not questioned any more. The problems how we can live together and what are the value of things that we produce, buy and treasure are hardly thematicized in public. “Economization” is encountered in all areas of life and leads to a “marketconforming democracy.”

Politics is politics for the few powerful and rich in which the large part of the population is ignored. Politics no longer pursues the goal of providing for the well-being of the people. The Occupy movement shows the breadth of this theme.

In her oath of office, Angela Merkel swore her dedication to the well-being of the people. In the meantime she equates the people’s welfare and the prosperity of the financial markets. In every speech, she emphasizes the well-being of the financial markets means simultaneously the welfare of the people. Thus she concentrates on the well-being of the financial markets. The people’s loss of trust is hardly mentioned. Turn your attention to the trust of the financial markets. Speculators hardly concerned about trust are given free reign. They seek to gain the greatest possible profit from their transactions undisturbed and unmolested. Trust is only based on the government giving the greatest possible support to their projects. The banks would have to fear for their exorbitant profits if a crisis of trust existed on the financial markets. But that is not the case now.

Instead the chancellor proclaims a market-conforming joint-determination of the parliamentarians. A paradigm shift on the central position of markets has taken place here.

However did trust in the markets and the financial system first lead to the crisis?

Was there really a crisis of trust? No. Banks like to lend their money to the state at low interests, even below the inflation rate instead of lending at higher interests to other banks or investors and taking responsibility for that. Thus the mistrust is toward their own branch, the other banks, and not toward the state.

“BAILOUT UMBRELLA” FOR THE PROSPERITY OF THE BANKS

The state compliantly jumped out of the way and immediately unfurled the “bailout umbrella” when the speculative transactions went wrong. The state helped them out of a real mess. Thus there were no signs of a crisis of trust between the state and the financial markets. This is only the pretext for making unpopular decisions that only serve the well-being of the financial markets and their profits and by no means the welfare of the people.

To the people, self-regulation of the markets and privatization as better solutions for more prosperity turned out to be lies and brought about the exact opposite of what was proclaimed.

The representation of the Euro-crisis as a state debt crisis is only a neoliberal pretext to make social expenditures irresponsible and simultaneously cut spending. Politicians are not afraid of publically spreading this fraud by appealing to economists recognized worldwide (without naming them).

Releasing state indebtedness from responsibility in the financial crisis lacks all reality because the state had to give millions in the bank bailout. All the doors were opened to the speculators. A real debt problem occurred through higher risk charges at interests in the theoretical financial crisis. However this has nothing to do with state indebtedness.

CAUSES OF THE FINANCIAL CRISIS

Real-economic causes including wage dumping in Germany leading to a distorted competitive situation were real causes of the financial crisis. An export surplus arises and engenders import deficits on the other side. This leads to imbalance in the European economic circulation. Another aspect is that a state cannot really save. The model of the “Schwabian housewife” from Ms. Merkel is not true at all for a national economy. The “Schwabian housewife model” is conservative and short-sighted and has nothing to do with the functioning of a national economy. Saving today would be hoarding money withdrawn from the

economic circulation. If everyone saved and no one needed credits any more, banks would be superfluous and the economic circulation would break down since there would be no money to invest or pay wages.

Markets are seen as independent and influential actors and politics has to orient itself there. This seems an increasingly obvious result of the euro-crisis.

Soothing markets, unfolding bailout umbrellas and organizing crisis summits indicate that politics has long let the economy go. The term “market-conforming democracy” coined by German chancellor Angela Merkel is evidence of that.

The change of markets from service provider to political factor was silently carried out as without alternative. Lobbyists from the economic and banking realms determine politics to a great extent. There are no competent experts in the German Bundestag that do not come from the banking sector that could control the banks. Those who caused the fraud are the controllers.

Despite high and mighty, pompous promises, a control or reform of the financial markets has not occurred – only little touch-up jobs. In Jens Berger’s metaphor, this is like replacing a window sill in an otherwise disintegrating house whose foundations are already tottering.

DEMOCRACY AND MARKET

The question whether today’s modern democracy must keep up in speed with the markets is out of place because democracy has to focus on the benefits and well-being of the people and has nothing to do with speed or infinite growth. The influence of markets and financial branches on politics should not be absolute or unrestricted. Politics only exists now for the rich and powerful. The government has long been talked out of decision-making in politics and citizens cannot join or share in any deliberative process. The meaning of democracy falls by the wayside. “Democracy is suspended by anonymous financial markets” (Jens Berger).

The banks and not the people seem to be the sovereign. Jens Berger reveals the lies and deceptions of pension promises by simply raising the question: should we trust investments in other countries?

On the other hand he recommended complementary currencies and cooperative banks. The 2008 crisis hardly damaged these possibilities. However they do not have a lobby. Lobbyists of big business sit in the Bundestag and bring their influence to bear.

Market-conforming principles have already deeply penetrated collective and individual thinking and acting and affect individuals, democratic systems and public institutions.

Jens Berger’s interesting and very comprehensive address clarified several errors and ways of looking at things. The questions from the public brought many more aspects into play. The lecture series is supported by the Dresden Drama Society and the chair for Political Theory and the History of Ideas of TU Dresden.

[1] http://hpd.de/politik [2] http://hpd.de/vor-ort [3] http://www.nachdenkseiten.de/ [4] http://www.spiegelfechter.com/wordpress/

STUDYING ECONOMICS TODAY IS LIKE BRAINWASHING Interview with Ulrich Thielemann Interview with Ulrich Thielemann. Economic ethicist urges a re-definition of economics [This interview on Germany radio published on 4/5/2012 is translated from the German on the Internet, http://www.dradio.de/dlf/sendungen/interview_dlf/1723559. MeM stands for "Human Market Economy," a think tank for economic ethics in Berlin.]

As a general accounting, economics over decades has withdrawn into its shell or shut itself off from the world and pushed the economization of all living conditions, the economic ethicist Ulrich Thielemann believes. Economists of all camps had always courted capital instead of taming it. dradio: The financial crisis and the crisis of the Euro show the failure of traditional economics. Therefore a group of professors in a memorandum demand a replacement of economics. One of the initiators, Ulrich Thielemann, is a director of MeM - the abbreviation stands for "Human Market Economy" - a think tank for economic ethics.

I welcome him on the telephone. Good day, Mr. Thielemann!

Ulrich Thielemann: Good day, Mr. Breker! dradio: Was the concrete market economy inhuman in the past?

Thielemann: Good question, but I would not answer with Yes. I would say keeping the market economy human is a constant challenge. When the market economy is spoken of with one voice by economists, that is an inhuman market economy. We obviously find that in praxis. With theories in their heads, economic students later set out in praxis as managers, entrepreneurs and advisors of economic policy. dradio: Do you see shortcomings in traditional economics? What are the concrete deficiencies and which disturb you most?

Thielemann: This memorandum is really very concise and aims at a deficient

scholarliness of the economic discipline. We say a discipline or science is unscientific when it paradigmatically shuts itself off or encapsulates itself, when it only allows one opinion and ignores opposing views.

Two things should be emphasized. Economists largely see themselves as the most consistent advocates of the markets and market logic. This is ethically very dubious in two keywords rationality and efficiency. Something very specific, ethical and normative is meant here. What is circulated is ethically very questionable. For economists, rationality means striving for one's own interests. That is rational. The name homo oeconomicus stands for that and is classified as rational. Whoever does not consistently pursue his self-interest is then regarded as irrational. That is a false message. Some say, studying economics today is like brainwashing. dradio: You want to connect economics and social science. Is that possible? Isn't that mixing fire and water?

Thielemann: Yes, people can see it that way at the moment. First of all, the economics discipline is a social science. What else could it be? The challenges are enormous because I and the co-signers believe a malformation has crept in over many many years. Thus every criticism of this degenerate economizing of all living conditions and above all the economizing of thinking is important. Every criticism is first ignored, one could say. It is not observed but repressed and has no chance. One doesn't have a whisper of a chance if one thinks critically, holds business as usual to be wrong and wishes to publish in a recognized journal. The discipline has encapsulated and shut itself off and that is an unbearable state. dradio: Isn't the financial crisis an example of that? We witness politics chasing after the markets. This is called the economization of politics and our life together visible everywhere.

Thielemann: Yes, this is manifest everywhere. The question is how can it be restrained? Economists, speaking in a sweeping way as though economists were very uniform, speak of this economization of living conditions including politics. However this is not so very clear with the financial crisis... Economists no longer speak so much with one voice because of the conflict between those who say capital may not be reduced and those who say we may not ensure those who lose capital on the market. A certain conflict takes place there. Economists of all camps including Keynesians have courted capital. Ultimately this courting of capital led to building gigant6ic asset bubbles that prove illusionary. Politics now strives to not really understand the connections. We the people who normally are not profiteers or receivers of capital income are called to gain these profits. The austerity programs

symbolize this development. This is the wrong policy. Capital must be tamed, not courted. How this can happen is a difficult problem. dradio: Yes, tame capital. Since the outbreak of the crisis, people have urged regulating the financial markets. But nothing has happened.

Thielemann: Yes, exactly. The opposite has actually occurred: capital is courted in another form. On one side, it is courted by the guarantees that we must give. I think Steinbruck (German economics minister) has looked at the abyss. Otherwise there would be a worldwide economic crisis. The early 1930s and the end of the 1920s should be recalled. Capital is courted today by the policy of the European Central Bank that gives billions to the banks. What follows from this is unclear. People do not understand and are not ready to ask profoundly how capital actually works. Capital, I argue, acts like a whip on the real economy. It does not serve the real economy but exerts pressure on the real economy, on us economic actors - whether as employees or entrepreneurs. In freedom, we must ask ourselves if we want more of this pressure. dradio: What would be different if your kind of economics were applied?

Thielemann: An ethically reflected economy would be a revolution of ways of thinking. The economy includes theory, our view of economics and the real economy.

A moderate and embedded market economy would arise. Market as principle would not govern. We would have a distanced and sober relation to this strange and hardly comprehensible logic of market and competition. This logic would not determine all of life. Rather we would determine how far we would support this market logic and how far we would limit it.

THE ECONOMIC FALL FROM GRACE: ECONOMY IN CRISIS

By Ulrich Thielemann The economy should be a part of life, not a steamroller crushing self-determination and creativity. Crisis and chance are represented by the same Chinese letter. The financial markets should be tamed, not soothed, shriveled not inflated. Finance capitalism makes the state into an errand boy of the banks (Bill Moyers). The state debt crisis is really a crisis of the myth of deregulation and of the myths of flexible labor markets, profit maximization and competitiveness. Stocks are often held for two seconds and no longer four years.

[The criticism of the economic ethicist Ulrich Thielemann shakes the foundations of

economics. This article published on 4/17/2012 is translated from the German on the Internet, http://www.tagesanzeiger.ch. The economy is criticized. The discipline is too market-fundamentalist, too dogmatic and too imperialistic. A new beginning is expected after the economic crisis. How do experts tackle these criticisms?]

[Ulrich Thielemann is director of the MeM think tank for economic ethics and lecturer at the University of St. Galen. From 2001 to 2010 he was co-director of the Institute for Economic Ethics at the University of St. Galen.]

Everyone occupied professionally with economics today, whether as a leader in a business or as an advisor of economic policy, passes through a course of economic studies. Certain messages are taught about true economics. A whole worldview is communicated. The study of economics is a school of economizing of thinking and ultimately of the world.

ECONOMIZING OF THINKING In the study of economics, one learns that benefit-maximization is rational. Every deviation from that and every refusal to gain whatever can be gained must be regarded as irrational. “Whatever profits is rational,” as Max Frisch sarcastically characterized this message. In the study of economics, one only learns prescriptions about maximizing profits. Everything that opposes that must be eliminated.

These are really pseudo-profits or excessive risks, not high profits. The higher the profits, the more the success. Consequently investors to whom the profits flow are “principals” who have all prerogatives. An investor is an “agent” of this principal or of capital. Since are persons are rational when they strive unrestrainedly for their own advantages, the agents stimulate the management through bonuses and give the highest possible profits to investors.

That all this is legitimate is confirmed in the economics lectures. There one learns a marvelous whole arises out of the interplay of the Homines oeconomici intent on their own advantage, apart from exceptions. The prosperity of everyone will be constantly increased. This is then called “efficiency.”

ECONOMICS IS ETHICS – A MISGUIDED ETHICS Economics is a normative ethical theory, a theory justifying the market logic.

“Economists” who speak as a group of like-minded “are the most consistent advocates of the market.” So the Konstanz economist Friedrich Breger formulated just before the outbreak of the financial crisis.

That these advocates for market logic are normative and ethically very dubious does not even occur to most economists. They believe they are carrying out a purely empirical, “positive” or “value-neutral” discipline. In this way, they relieve themselves of awkward questions that could cause the whole system of theories to collapse. As Breyer explains, practically all economists are convinced of the – supposed! – “soothing effect of the market.” But “the rest of the population” sees this rather skeptically.

Why is this? The rest of the population feels the competitive pressure and the economizing of living conditions the hard way from experience. The people are confronted with an increasingly radical management that is still paid lavishly for their unscrupulousness in raising shareholder value. They must watch how the agents and principals of the banks take them hostage as taxpayers and make average citizens serve capital in ever new dimensions. This happens indirectly through the neoliberal austerity programs now implemented everywhere. All over Europe “drastic cures” are now imperative.

ONLY AN EMBEDDED MARKET IS A GOOD MARKET Economism likes to play the card that there can only be “the market” or no market. That is the real fall from grace of economics. Any idea of moderation and relativization is absent in economism. It is so simple: the market must be embedded in social meaning and fairness. Otherwise the right of the stronger is in effect, the right of the more solvent and competitive. This is both an individual challenge and an overarching political challenge. This is the task of a globally-coordinated world policy since the democratic sovereign in the course of globalization has largely lost political freedom – everything turns only around “competitiveness” of societies degraded to locations.

Then we could raise two questions that are very relevant for economic and social policy.

Is the stress worthwhile in producing growing competitive pressure? Are the marketconditions fair? The first question, the question about the good life – and good work – cannot be answered individually because capital has the say in the global competition.

Those who try end up on the losing side. Economists like to refer triumphantly to the discussions about the supposed necessity of neoliberal reforms. This is also ultimately a justice- or fairness question. This does not immediately press on citizens because the “perpetrators” of the growing competitive pressure – all of us even if to a different extent – hide behind the invisible hand of the complex power relations.

ECONOMICS AS AN ETHICAL-CRITICAL AFFAIR We need an economics not biased from the start against the market principle, which does not plead for the market in all life situations. A false economics likes to gloss over everything as “liberalization” although a loss of freedom occurs. Ensuring competitiveness – whether of individuals, businesses or whole states – is uppermost.

Ethically illumining the complex ways that people act through market and competition is one of the challenges of such an economics.

Presumably a gigantic capital bubble has formed. Serving that capital bubble overstrains the rest of the population. That’s the reason it is a bubble. The income statistics for the super-rich are revealing. This bubble is the result of the market-fundamentalist “courting” (Hans-Werner Sinn) of capital.

The world must transition from courting to taming capital. The key question is: how can the bubble be removed without ending in a catastrophe? Answering this question requires economic competence and a turning away from economist biases against the market principle.

MANAGERS DO NOT ONLY SERVE SHAREHOLDERS Interview with Ulrich Thielemann "It is not legitimate to exploit every conceivable outsourcing chance. It is not legitimate to declare jobs superfluous to realize double-digit profits.. Profit cannot be the only maxim of good entrepreneural conduct.."

[This interview published in: Nurnberger Zeitung, 3/11/2005 is translated from the German on the World Wide Web, http://www.nz-online.de/artikel.asp? art=313654&kat=4.]

[Banks post record profits and announce layoffs. Heads of health insurances enjoy enormous salaries despite savings pressures. What is going wrong? Nurnberger Zeitung spoke with the economist Ulrich Thielemann. He is co-director of the institute for Economic Ethics at the University of St. Gallen and has published studies on “Ethics and Success” and “The Market as a Principle.”]

NZ: Shouldn’t an economic ethicist despair in view of the latest manager scandal?

Thielemann: No. These blatant cases of misguided management offer abundant illustrative material for enlightenment in economic ethics. The economic ethicist thinks in right and wrong, not in good and evil.

NZ: What is right and what is wrong?

Thielemann: Josef Ackermann said: “Germany is the only country where those who create profits are taken to court although they should be praised.” A peculiar public interest fiction underlies this remark: Whoever is successful read from the balance statement of the firm or individual promotes the well being of everyone. Therefore Ackermann has a completely clear conscience (Ackermann is chairperson of Deutsche Bank that posted record profits and simultaneously laid off thousands of employees). He has a harmonious theory about how the market functions. Economic ethics starts here by showing the shortcomings of this theory.

NZ: How does a good manager act?

Thielemann: A good manager knows that economics is full of conflicts and that there are a whole series of claims giving rise to serious conflicts, above all between capital and labor. An integrated manager knows about these conflicts and does not simply iron them out with a harmonious market theory according to the motto: Everything that brings success is ethically all right.

NZ: How do you counter that?

Thielemann: Managers who practice integrated economics do not only serve one claimant group like the shareholders. Concerning the urgent current problem of shifting jobs to low-wage countries, it is not legitimate to exploit every conceivable outsourcing chance. It is not legitimate to declare jobs superfluous with the sharpest possible pencil to realize double-digit profits. One can be economically successful below the threshold of 25-percent capital profitability set by Ackermann.

NZ: Many firms justify layoffs as practical economic necessities. How can ethics and success be reconciled in such a conflict?

Thielemann: High profits show that practical necessities can never make doing what is ethically right impossible. However it could be unreasonable not to order layoffs – under existing conditions that can be changed.

NZ: Can an ethical boundary line be drawn between the pursuit of profit necessary for survival and reprehensible profit maximization?

Thielemann: Yes. Profit maximization is not justified a priori. Profit maximization means considering all claims only when this pays. Profit cannot be the only maxim of good entrepreneurial conduct. It is one important aspect alongside others. Whoever understands this as a manager practices a different economics.

NZ: In a report of the German ministry for families, children were recently described as growth factors. Does this reflect the spirit of the times?

Thielemann: We live in an age of the economizing of living conditions. In my opinion, German social democracy acts in a neoliberal way. By neoliberal, I understand that the state defines itself as a business whose only goal is to make society fit for the world market. All policy including family policy stands under the directing of increasing the competitiveness of Germany as a corporation. These are dramatic changes in attitudes.

NZ: How will our economic system appear in 20 years?

Thielemann: The future is hard to predict. We are actually at a turning point. The question is whether the global world market will be useful to society or whether we let things take their course. If we let things run their course, large parts of the formerly rich North and West will become impoverished because they cannot hold their ground to the competitiveness of the Far East. We will not only have to work longer. Self-assertion on the world market will dominate our life almost completely.

This will be a genuine valley of tears.

TEN THESES ON THE CRISIS AND ITS SOLUTIONS, 2010

By Stephan Schulmeister Stephan Schulmieister, economic researcher in Vienna, is the author of the 2012 book "New Deal for Europe - in the Great Crisis." He emphasizes the need to attract investments to the real economy and to shrivel the financial sector.

[These theses published in the Vienna Institute for International Dialogue and Cooperation news 14.2010 are translated from the German on the Internet, http://www.virc.org.. The transition from finance- to a real capitalist economic system began with the "great crisis." This will last years. Finance capitalism increasingly dominant in the last 30 years is full of speculative bubbles and extensive crises based on "money out of thin air" and "letting money work."]

Thesis 1: The great crisis ushered in the slow collapse of finance capitalism. This form of the market economy has spread since the 1970s. The capitalist "nuclear energy," the pursuit of profit, concentrated most strongly on finance-assessment and -speculation (in the real capitalism of the 1950s and 1960s it could only develop in the real economy).

Thesis 2: The breeding ground of finance capitalism is the neoliberal worldview. The task of stable exchange rates together with dollar devaluation, oil price shock, recession and high inflation in the 107-s and their control through a high interest policy along with deregulation of the financial markets and the boom of financial innovations (derivatives) in the 1980s - all this was based on neoliberal recommendations. Economic growth was cut in two; unemployment and state indebtedness soared.

Thesis 3: Neoliberalism uses the problems it creates for the further implementation of its demands. With the state indebtedness, austerity policy and (as a result) the weakening of the social state were justified and with unemployment the deregulation of labor relations, atypical jobs and lower unemployment benefits. Both developments dampen economic growth and increase inequality.

Thesis 4: The neoliberal (reform) policy strengthens the mentality of "let our money work," particularly through promotion of capital "covered," market-based old age provisions as a main goal of politics. This gained the day through the "art of trading" and through fixation on the stock exchange as the lever of the economy. All this promoted a financial boom since the 1990s.

Thesis 5: With the boom on the stock-, raw materials-, currency- and real estate markets, financial assets were created without any real economic cover. The potential for the great crisis was built. That crisis detonated from 2007 through the simultaneous devaluation of stock-, raw materials- and real estate assets. Demand and production collapsed.

Thesis 6: Politics only fought the symptoms of the great crisis with bank- and economic packages while its systemic causes remain untouched. Even worse, the "financial chemistry" booms more than ever, whether through speculation on state bankruptcy, higher raw material prices or euro devaluation. All this was legitimated by the neoliberalism. Thus it cannot be seen by the elites as a cause of the crisis ("sorcerer's apprentice syndrome").

Thesis 7: For over three decades the conversion of neoliberal recommendations has increased unemployment, state indebtedness and poverty, weakened the social state and built up the potential for the great crisis. Now the elites urge those therapies that are part of the sickness: reducing social spending, further privatizations, sparing financial assets and no consolidation help of the wealthy.

Thesis 8: The hardest phase of the great crisis is ahead of us, not behind us. All the sectors try to safeguard their positions through spending cuts - amid recently falling stock prices, higher unemployment, empty state treasuries, EU-wide austerity policy and unstable exchange rates and raw material prices: businesspersons, households, foreign countries and the state. This is material for a crisis lasting several years.

Thesis 9: In such a situation, the state must give long-term impulses to the real economy while simultaneously stabilizing its financial position. There is only one way to do that: "demanding significant consolidation help from the highest incomes, particularly the owners of mammoth financial assets for economic reasons. The "rich" react to (slight) income losses with a restriction of their savings (unlike recipients of welfare benefits), not with a restriction of their consumption. With these funds, an expansive overall strategy could be financed that fights state indebtedness, unemployment, social inequality and climate change "as a whole."

Thesis 10: Such a strategy would join the ("real capitalist") tradition of the social market economy. It would strengthen the cooperation between businesses and unions, put the "financial chemists" in their place and make possible the transition to a real capitalist system where the interests of labor and real capital have priority over the interests of finance capital (8/18/2010). I described the most important components of this strategy in a compact book "New Deal for Europe - in the Great Crisis" (Picus Verlag publisher, 9.90 E).

GOOD INTENTIONS - BUT SHIPWRECK Depression as a Consequence - Implosion of Finance Capitalism

by Stephan Schulmeister [This interview published in: Erziehung und Wissenschaft 1/2012 is translated from the German on the Internet. Stephan Schulmeister is an economics researcher in Vienna. His latest book is "New Deal in Europe in the Great Crisis."]

What are the systemic causes of the Euro crisis? What ideas, developments and political decisions produced the crisis? The Euro crisis represents the latest stage in the process of the implosion of finance capitalism. This form of the market economy dominant for 30 years shifts the pursuit of profit from the real economy to financial investment and speculation (the pursuit of gain could only be realized in the real economy in the realcapitalist prosperity phase of the 1950s and 1960s). The systemic under-performance of business activity compared to "financial chemistry" generated increasing financial assets without a real-economic background - from over-rated stocks, currencies and raw materials to government bonds. The devaluation of "fictional capital" (Karl Marx) in the course of grave financial crisis (1873ff, 1929ff, 2007ff) ushers in the transition to the depressive phase of the "long cycle" (from 1873 to 1890, from 1929 to 1948 and from 2007 to ???). Let us sum up the last cycle (1929 to 1948).

Finance capitalist euphoria in the 1920s led to a stock boom. The 1929 stock market crash triggered a recession that deepened to a depression for three reasons. Firstly, real estate- and raw material assets were massively devalued, not only stock assets. Secondly, the economic theory of "Laissez-faire" dominant in finance capitalist phases - encouraged politicians to react to the downhill state finances with austerity policy. Thirdly, countries waged an economic war against each other according to the motto "Save yourself if you can" (especially through currency devaluations). The consequences of the world economic crisis were so devastating that politics has learned profoundly from the crisis. A new economic theory developed (Keynesianism). A social market economy arose. The pursuit of profit could only be realized in the real economy.

Stable exchange rates, stable raw material prices and interest rates below the growth rate were crucial for the success of this model. The result was the socalled economic miracle.

BREAKING DOWN IN SUCCESS However the real-capitalist "game plan" ultimately broke down in its success. Permanent full employment required an offensive of the unions, particularly in Italy, France and Great Britain. This necessitated redistribution and joint determination and was partly carried out through a massive expansion of strikes. The year 1968 made the rich distraught... The status quo could not continue from their perspective. The hour of the Renaissance of "Laissez-faire" had come. The theories of the neoliberal "master minds"

Milton Friedman and Friedrich A. von Hayek demanded the dethronement of the unions and dismantling the welfare state. These demands became "historically powerful" through the liberalization of the financial markets demanded by neoliberal economists, above all by abandoning stable exchange rates and low interest rates.

FINANCE CAPITALISM BOOMS Finance capitalism established itself. At the same time economic performance deteriorated: • Two dollar-devaluations led to two "oil price shocks" (1973 and 1979) that triggered the first two "synchronous" recessions in industrial countries. • The inflation that rose considerably through the "oil price shock" was fought primarily through a high interest policy at the beginning of the 1980s. Since then the interest rate has been nearly always above the growth rate. • The development of countless financial derivatives facilitated the speculation that destabilized exchange rates, raw material prices and interest rates. • Businesses shifted their activities from real to financial investments.

Economic growth fell while unemployment and state indebtedness increased. • Austerity policy since the beginning of the 1990s (Maastricht) put a damper on the growth dynamic while the stock exchanges boomed. The (self-) destructive forces of finance capitalism detonated in a "quake," the stock market crash of 2000/2003. Its systemic cause, destabilizing speculation on the "freest" markets, could not be seen with "neoliberal glasses." The final heyday of finance capitalism began afterwards. Stocks, real estate and raw materials boomed and a threefold crash potential developed that first activated real estate and then stock and raw material prices in 2007. From the summer of 2008, these three most important kinds of assets have been simultaneously devalued (for the first time since 1929)... Businesses and households limit their demand and the state deficit increases. Public funds are made available for bank bailouts and economic stabilization.

INTEREST-EPIDEMIC THROUGH CDS The state debts grew most intensely in countries where a real estate bubble burst (Ireland, Great Britain and Spain) or the budget deficits were already high before the crisis (Greece and Portugal). The professional "investors" exploited this situation. Speculation with "credit default swaps" increased the loan interests dramatically to 17 percent in Greece and twelve percent in Ireland and Portugal. The interest-epidemic forced the Euro-bailout umbrella. Its help is tied to strict austerity. The afflicted countries shrivel or stagnate the more savings is ordered. As a consequence, bond interests climb higher and the epidemic now seizes Spain and Italy. At the same time leading EU actors reinterpret the finance capitalism crisis as a state-debt crisis. Germany along with France, Holland and Austria profit from speculation against weak Euro states. An "interest-seesaw" develops. The greater the interest burden of the "miserable" states, the less the burden on the "brave" states. The division within the EU expands: Germany refuses communal solutions like Euro-bonds because the disciplinary effect of the "market" would be cancelled.

GERMANY AS DISCIPLINARIAN Market religiosity is anchored more firmly in Germany than in any other EU country.

Germany profits most from speculation against the southern countries. In the last weeks, the interest-epidemic has dramatically strengthened, also for France, Holland and Austria.

Loan interests clearly increased. Germany sits on one side of the seesaw with the rest of the EU on the other side. The economy of the EU countries is simultaneously on the way into recession. This recession will intensify into a "mild" depression lasting several years (businesses, households and the state will reduce their demand). This time Germany acts only as an economic disciplinarian and will be rewarded with interest-rebates "by the mark." On the other hand the situation in other countries worsens through higher interests. In short, we again stand at the beginning of a depressive phase of the "long cycle." Fighting a system crisis caused by the neoliberal ideology with means of neoliberal symptom therapy would destroy many things in Europe. The German politicians who have to answer for this are convinced Europeans. They mean well. But whoever navigates with a wrong map steers the ship like a mad man.

THE CRISIS EXPLAINED

by Tomasz Konicz So much crisis was never analyzed with a crisis-conditioned satisfaction guarantee!

Instead of seeking culprits, we must seek the systemic causes of the indebtedness dynamic. These gigantic debt mountains were necessary to keep capitalism functioning.

Fewer and fewer workers can producer more and more goods in an ever-shorter time.

THE CRISIS EXPLAINED What you need to know about the crisis but never dared ask.

Different FAQ on the permanent capitalist crisis [This article published 12/23/2011 on the German-English cyber journal Telepolis is translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/36/36123/1.html.]

Have you made yourself at home in the permanent crisis? Do you have an overview on all the huge debt mountains collapsing over us? A very special service is now offered for all who want to see through the crisis thicket. Do you want to become a crisis expert in a few minutes with the great FAQ on the crisis? The causes of the crisis will be named and the most frequent crisis myths unmasked. As the main attraction, links to texts offering more information and background on the complex themes can be found at the end of each answer. So much crisis was never analyzed with a crisis-conditioned satisfaction guarantee!

GIGANTIC DEBT MOUNTAINS PILE UP EVERYWHERE. WHO IS NOW RESPONSIBLE FOR THE PRESENT DEBT CRISIS? THE LAZY SOUTHERN EUROPEANS OR OUR GREEDY BANKERS?

Instead of seeking "culprits." We must seek the systemic causes of the indebtedness dynamic. In the past decades, these gigantic debt mountains arose because they were necessary to keep capitalism functioning. Without contracting debts, the system would break apart in itself. Increasingly private and/or state indebtedness is a system prerequisite without which capitalism cannot reproduce any more. We need only call to mind that borrowing really represents a turn to the future where financial resources are made available here and now that must be gained later from borrowing and paid back.

These credits are expended for investments, building activity or consumption. As a result, debt overload creates an additional credit-financed demand that has a stimulating effect on the economy. In the final analysis, it does not matter whether the state, the private economy or consumers become indebted.

This credit-generated demand stimulates the economy and leads to further economic growth. Whether the American state orders new cruise missiles, builds new vacation homes in Spain for speculative purposes or consumer credits are awarded in Eastern Europe, all these actions generate demand, create jobs and animate the corresponding industrial branches. A so-called deficit economy arises if the indebtedness dynamic is strong enough. This economic upswing is based on the accumulation of debts or deficits.

These deficit economies acted as the crucial motor of the world economy in the epoch before the outbreak of the world economic crisis in 2008. This was a long term process that started with the realization of neoliberalism and the rise of the financial sector in the 1980s and gradually intensified.

This indebtedness dynamic that went along with the expansion of the financial markets was supported by gigantic speculative bubbles in the financial sector that stimulated the economy up to their collapse. The real estate bubbles that burst between 2007 and 2008 with their enlivening effects on industry should be named here since they occurred with the real building activity. Not all countries became indebted equally. By a great distance the US was the strongest deficit economy - together with its huge debt mountains followed by Southern Europe, Eastern Europe, Ireland and Great Britain. These countries and regions showed rising balance of payments- and/or trade deficits while experiencing a continuing de-industrialization. A series of countries with enormous trade surpluses and significant industrial sectors engaged in a sharp predatory competition. China, Germany, Japan and South Korea can be named here. These countries could profit by means of their trade surpluses from the indebtedness processes in the US and Southern Europe without having to become encumbered themselves. The vast global European "imbalances" in their trade balance sheets can be explained by this development.

Capitalism as a world system cannot function anymore without these deficit economies and their imbalances. As soon as the private or state credit-generated demand collapses, a self-intensifying downward spiral starts in which over-production leads to mass dismissals, demand falls again and more waves of dismissals result. More information: "The End of the `Golden Age' of Capitalism and the Rise of Neoliberalism" [1] "Explosive Expansion of Financial Markets in the Clinton Era" [2] "From Real Estate Speculation to Collapse of the Global Deficit Economy" [3]

WHY CANNOT CAPITALISM REGARDED AS THE MOST EFFICIENT ECONOMIC MODE FUNCTION ANY MORE WITHOUT CONTRACTING DEBTS? WHAT IS THE REASON FOR THIS DEPENDENCE OF THE CAPITALIST WORLD SYSTEM ON CREDIT? Its increasing operational efficiency in the last years drives capitalism in an indebtedness pressure. The system is too productive to maintain its reproduction within its productive conditions without deficits. Summarizing according to Marx, the productive forces break the chains of productive conditions. Thus this capitalist system crisis is actually a crisis of capital. The businessman invests his money as capital in machines, labor power and raw materials to produce new goods in factories that are profitably sold on the market. The expanded capital is reinvested in this boundless exploitation process of capital to produce even more goods.

This process of the accumulation or exploitation of capital cannot function any longer without contracting debts. To make this diagnosis completely understandable, the famous contradictions inherent in the capitalist production mode must be briefly explained.

Besides the well-known contradiction between capital and labor, another fundamental incongruity marks the system resulting in a permanent structural change. Even though paid labor is the substance of capital, capital strives to banish paid labor as much as possible through rationalization (out of the production process). A kind of race with the machines occurs. Market competition forces entrepreneurs in all industrial branches to continuously rationalize their production with technical-scientific innovations.

Employment in long-established economic branches continuously falls. The same technical progress that leads to job cuts in established industrial branches also encourages the rise of new industrial branches. In the history of capitalism, there was always a structural change in which old industries disappeared and new industries were added.

Fields for investment and paid labor are opened up. Therefore the history of capitalism is marked by a succession of key sectors of the economy that act as accumulation-, business cycle- and employment centers: the textile industry, heavy industry, chemicals, electronic industry and auto manufacturing. However this structural change does not function any more with the rise of the third industrial revolution of micro-electronics and information technology.

While the IT industry creates jobs, its technologies and products are applied across the economy and far more jobs disappear than are created in the course of globalization measures. A process of the melting away of paid labor is carried out within goods production. Fewer and fewer workers can produce more and more goods in an evershorter time. As a result, the advanced capitalist countries fell into the crisis of the work society with increasing unemployment, general precariousness and/or stagnating wage levels. At the same time, spending for infrastructure and production investments increases with the technical level of production. This again strains mass demand and/or business profits. The necessary aggregate social investments to maintain the accumulation of capital always continue growing. The relation between profitable capital exploitation and the necessary expenditures for that exploitation shifts in favor of the

latter. Thus the true causes of the crisis are contrary to the populist slogans according to which the populations of threshold countries, Europe or the US lived "above their means." The exact opposite occurs.

Capitalism has reached such a high production level that it could only lead a kind of zombie life for a long while by contracting debts - up to the great crash. More information: "The Crisis Myth: Greece" [6] "Robots instead of Workers" [7] "The Race with Machines" [8] "A Corpse Governs Society" [9] "Perhaps We Are All Inmates in an Insane Asylum" [10] "On Debts and Jobs" [11] WHAT ROLE DO THE FINANCIAL MARKETS PLAY? THE EVIL "BANKSTERS" HAVE GOT US INTO A REAL FIX WITH THEIR BOUNDLESS GREED, IT IS SAID EVERYWHERE. Since the financial crash preceded the economic collapse, the impression arises that the financial markets cast the real economy into the abyss. However the financial markets by awarding credits kept the real economy going by producing credit-financed mass demand. The financial markets made possible the deficit economies since credit is generally the most important "asset" of financial management. The collapse of the real estate bubble in 2008 and the "credit crunch" led to the collapse of demand and the economic crisis of 2009. The growth of the financial markets for decades was itself a result of the above-described crisis of the work society resulting from continuous rationalization.

Capital streams where the highest profits are expected. Criticizing bankers for excessive greed is absurd since "greed" - as the highest possible capital expansion - is the nature of capital. This is also true for goods production as well as for the financial branch. When the utilization of capital in the goods-producing economy comes to a standstill and increasing predatory competition lowers profits, investment-eager capital now streams into the financial markets. In general, financial excesses result from a crisis in goodsproduction. The rapidly expanding financial markets seem to play the role of the key sector of the economy since the structural change in the real economy did not function any more.

The financial explosion from the 1980s and 1990s was unstable and not lasting for the long run even though many jobs were created in the financial sector. This explosive growth of financial management was built on sand. Capitalist wealth expressed in the abundance of goods must be deconstructed in the framework of capitalist exploitation.

The financial markets can contribute to this process by granting businesses credits that are used to modernize, for productive investments and/or expand quantities of production. On account of the systemic over-production crisis in the real economy, the expansion of the financial markets actually ran in another direction - in pure speculation that always leads ultimately to bubbles.

For two decades, we witnessed a kind of financial bubble capitalism characterized by the rise of ever-greater speculative bubbles that in their initial phase functioned as stable

economic motors and upon bursting leave behind ever-greater devastations. In a protracted process, the dependence of the whole system on the indebtedness dynamic increased successively: beginning with the Asian crisis at the end of the 1990s, the high tech bubble of 2000, the real estate speculation that burst in 2008 to the liquidity bubble that is presently bursting. In the past, the disastrous consequences of this collapsing speculative dynamic could only be delayed through new bubbles - through a blind "flight" into more speculative excesses.

We must make clear that the current state debt crisis can be referred back in large part to the bursting of the speculative bubbles in the real estate sector. Before the eruption of the crisis in 2008, Spain and Ireland had lower state indebtedness than Germany. State indebtedness exploded in many countries through "relief measures" in the billions for the staggering financial markets and "socialization" of the crisis losses. It seems paradoxical but the states have actually stabilized the financial markets through further indebtedness on the financial markets. But the European state debt crisis will not automatically become a financial market crisis since state bankruptcies would immediately drive the banks into bankruptcy that bought up government bonds. Thus both poles of capital socialization the state and capital - are chained together in a chain symbiosis. It is important to remember that state and private debts had the same aggregate social effect as stimulation of the economy. Therefore the debt mountains now piled up also represent an aggregate social burden.

The debt crisis is a crisis of the whole system and is not only a crisis of the states or the banks. In summary, an expanded financial sector can be interpreted as an undisputed crisis phenomenon - but not as the cause of the crisis. The advance of productive forces driven tempestuously by capitalism undermines the foundations of the capitalist production mode. The crisis has its causer in the contradictions of the goods-producing industry, not in the financial sector. The excessive proliferation of the financial markets keeps the real economy suffering under latent over-production alive through debtgenerated demand. More information: "From Real Estate Speculation to Collapse of the Global Deficit Economy" [12] "The Miracle on Wall Street" [13] "Hurrah, the (Pseudo-) Upswing is Here!" [14] WHAT CAN THE FINANCIALLY STRAPPED STATES DO NOW? WHAT OPTIONS REMAIN FOR POLITICS? Politics with its instruments cannot solve the present crisis. But it can delay the serious economic collapse that is threatening. Crisis policy finds itself in a philosophical paradox, in an insoluble self-contradiction in which it can only choose between two different paths into crisis. On one hand, politics can drive the state indebtedness higher and higher to prevent economic collapse. This approach which mostly goes along with an expansive monetary policy leads at the end to inflation or state bankruptcy - since ultimately the printing press must be turned on to maintain the indebtedness dynamic.

On the other hand, governments could try to reduce their huge debt mountains through draconian cuts. However this would cause an immediate economic breakdown that would

lead to considerable impoverishment in the impacted societies. Most governments decided first for contracting debts. After the outbreak of the crisis, the states maintained the indebtedness dynamic on the financial markets from 2008 on through credit-financed economic programs. The deficit economy formerly organized by the financial markets in which accumulation of debts stimulated the economy was nationalized after the crisis eruption - until the states hit the limits of their financial burden. With the increasing crisis intensity, the arguing over crisis policy escalated. The German government can now obligate the European Union to strict austerity programs while the US persists on continuing indebtedness and taking out loans. The conflicts over the concrete organization of capitalist crisis policy become more ferocious because both fractions in this dispute fear the disastrous consequences of the policy of the other side.

Several countries can no longer refinance their budget deficits on the financial markets because of excessive state indebtedness and must flee under the "Euro bailout umbrella."

Discontinuance of the debt-financed economic programs leads to an economic slack period, stagnation and recession. In their diagnosis, both sides are actually right in the financial policy conflict around the organization of future crisis policy. More state indebtedness will inevitably lead to state bankruptcy or hyper-inflation; ending state indebtedness will lead to recession. But both sides are also on the wrong way when they assume that their "therapies" and policy concepts could solve the fundamental crisis of the world economy that was only extended after 2008 through escalating state indebtedness. The irrational reflexes tending to the chauvinistic that spread in politics and the mass media and among those who raise capitalist ideologies to the extreme result from the impossibility of mastering this system crisis with the instruments of crisis policy. More information: "Politics in the Crisis Trap" [15] "Crisis and Mania" [16] WHY IS EUROPE NOW THE GLOBAL CRISIS CENTER ALTHOUGH OTHER STATERS - LIKE THE US - ARE SIMILARLY HEAVILY INDEBTED? The huge debt mountains of the US and Europe grew in similarly gigantic dimensions.

On both sides of the Atlantic, the causes of indebtedness can be referred back to the unsuccessful structural change and the crisis of the work society. Confronted with the crisis traps, policy in the US takes another course than in the Euro zone. The difference between the US and the EU lies in the readiness of the US to maintain the indebtedness dynamic of the US state by buying up government bonds - and accepting excessive inflation in the medium term. Since the US Federal Reserve bought up US government bonds on a large scale, the interest-burden of the US was kept low and a catastrophic economic collapse prevented since the state indebtedness dynamic - and the creditfinanced state demand - can be maintained. In the EU, Germany prevailed with the demand for immediate budget revitalization while the European Central Bank's buying up of government bonds was vigorously rejected by Berlin.

Without the European Central Bank's buying up government bonds, the interest burden of the Southern European debt states will soon be intolerable. A breakdown of the Euro zone will be very likely. Without continuing indebtedness, the Euro zone will sink into a gr4ave recession that is already announced with falling industrial production across

Europe. More information: "Greece as Crisis Myth" [17] "Will Europe Break Down in the Crisis?" [18] "A Comparison of the Transatlantic Debt Towers" [19] "The Worldwide Economic Crisis as a Debt Crisis" [20] HOW TERRIBLE WILL THE CRISIS BE? WHERE MUST WE ADJUST? In the short-term, the system will certainly sink in a serious economic crisis as soon as the indebtedness dynamic breaks down that still keeps capitalism going. The looming global depression could reach the intensity and drama of the worldwide economic crisis of the 1930s with grave social and political dislocations and upheavals. The economic collapse in Southern Europe will not be superseded by a later upswing. Instead a permanent economic descent occurs in the periphery of the EU that will drive back the affected countries in their civilization development. It is like the "third world" spreading from North Africa and the Mediterranean to Southern Europe. A process of the "melting away" of the island of prosperity of the "first world" is now underway on a global scale.

The coming global depression is only the latest stage of a long-term world-historic al process in which the capitalist world system hits the internal limit of its development capacity and collapses in its escalating contradictions. The system enters a phase of chaotic upheaval while the direction and ending of this process cannot be predicted. The American sociologist Immanuel Wallerstein described this period of systemic upheaval as follows: "We live in a phase of transition from our existing world system and capitalist economy to another system or other systems. We do not know whether this will be a change for the better or for the worse. We will first know this when we arrive there. This could take another 50 years. We know the period of transition will be very hard for everyone living in it...

It will be a time of conflicts and considerable unrest and a time in which the factor of free will is raised to the maximum. This is not paradoxical. Every individual and collective act will have a greater effect in building the future than in normal times during the survival of an historical system." Immanuel Wallerstein, Utopistik, Vienna 2002, p.43 In a certain sense, the conflicts and dislocations that are escalating globally can be understood as part of this struggle over the formation of the future world system even if this is mostly not clear to the actors in these struggles.

The enormous intensification of the upheavals and conflicts result from the fact that the present system becomes insufferable to more and more people since it strikes its limits of development. More and more people fall out of the process of capital accumulation. They become "superfluous" - while the pressure on wage-earners grows. The lack of perspectives of youth in the Arabian region was an important driving force of the upheavals in this area. Germany can be described as a burnout-republic while doubledigit rates of unemployment are reached in Southern Europe. These contradictions will intensify with the increasing intensity of the crisis. The outcome of this chaotic transformation process is completely unclear, as Wallerstein says, since he starts from the infinitely complex and interwoven actions of the dependent actors. The coming world

system can be much worse (more hierarchical and more dictatorial) than the present system - or better (more egalitarian and more democratic).

The society emerging from this transformation will certainly not be a capitalist society since it is the capital relation itself that strikes its internal limits and is the deeper cause of the current crisis. In the end, this crisis could also be seen as a chance to build a better, more democratic and more egalitarian social system. In abstracting from the concrete forms of capitalist socialization, the crisis assumes an absolutely absurd character.

Society suffocates in its surplus. Capitalism in the end loses its endless "race with the machines." Since too many goods can be produced with fewer and fewer workers, more and more population sectors and world regions sink in marginalization and impoverishment. Still the technical and material prerequisites for building a society that satisfies the basic needs of all people worldwide exists. More information: Immanuel Wallerstein on the End of Capitalism [21] "In 30 years there will be no capitalism any more" [22] "Reducing the Over-Capacities" [23] "Second wave of global economic crisis in the next years" [24] LINKS [1] http://www.heise.de/tp/artikel/29/29184/1.html [2] http://www.heise.de/tp/artikel/29/29235/1.html [3] http://www.heise.de/tp/artikel/29/29356/1.html [4] http://www.heise.de/tr/artikel/DerWettlauf-mit-den-Maschinen-1370433.html [5] link to www.heise.de [6] http://www.heise.de/tp/artikel/32/32551/1.html [7] http://www.heise.de/tp/artikel/35/35245/1.html [8] http://www.heise.de/tr/artikel/DerWettlauf-mit-den-Maschinen-1370433.html [9] http://www.heise.de/tp/artikel/5/5659/1.html [10] http://www.heise.de/tp/artikel/13/13628/1.html [11] http://www.heise.de/tp/artikel/35/35138/1.html [12] http://www.heise.de/tp/artikel/29/29356/1.html [13] http://www.heise.de/tp/artikel/31/31777/1.html [14] http://www.heise.de/tp/artikel/31/31137/1.html [15] http://www.heise.de/tp/artikel/35/35303/1.html [16] http://www.heise.de/tp/artikel/35/35813/1.html [17] http://www.heise.de/tp/artikel/32/32551/1.html [18] http://www.heise.de/tp/artikel/35/35514/1.html [19] http://www.heise.de/tp/artikel/35/35052/1.html [20] http://www.heise.de/tp/artikel/30/30415/1.html [21] http://www.youtube.com/watch? v=nLvszWBf6BQ [22] http://www.heise.de/tp/artikel/29/29687/1.html [23] http://www.heise.de/tp/artikel/32/32931/1.html [24] http://www.heise.de/tp/artikel/32/32932/1.html

TEA PARTY: EXTREMISM OF THE MIDDLE

by Tomasz Konicz The Tea Party wants to return to an idyllic past that never really happened. The Tea Party wants to stop the accelerating descent of the white middle class by driving ideological ideas to the extreme. The right-wing hardliners believe capitalism could be reanimated if the state were shattered.

[This article published on 10/27/2013 is translated from the German on the Internet, http://www.heise.de/tp/artikel/40/40172/1.html.

The budget conflict in the US illustrates the increasing influence of right-wing extremist forces within the Republican Party.

The super budget dislocation in Washington was averted at the last minute. Hundreds of thousands of state employees were back at work on October 17 after the US House of Representatives approved a compromise proposal 285 to 144 ending the week-long feud between Republicans and Democrats over raising the debt ceiling.

The new law enables the US government to continue its deficit budget to February 7 while a balanced commission of House representatives and senators haggle over a proposed compromise for the current state budget. A repetition of this budgetary trial of strength threatens if this commission cannot work out a sound proposal that incorporates both democratic demands for tax increases and the persistence of Republicans on budget cuts [cf “The American solution is called delay” by Tomasz Konicz].

This deferment of the permanent conflict between republicans and democrats is often judged by political commentators as a victory of President Barack Obama who refused to yield to the extortion attempts of the extreme right-wing within the Republican Party.

Republicans had demanded far-reaching cuts in Obama’s most important domestic project of health reform passed in 2009 amid vehement protests [cf. The Flogged Health Reform]. Now John Boehner, the republican speaker of the House of Representatives, had to concede the failure of this aggressive extortion strategy in a right-wind populist radio show: “We fought – and lost.”

The question is raised whether “the republicans” still exist as a somewhat united political group since the latest budget conflict revealed enormous ideological dislocations in the party. Traditionally those forces set the tone for republicans who ruthlessly represent economic conglomerates and the rich upper class. However the extreme right-wing gained more and more influence in the last years as America’s right-wing extremist

mainstream. The voting behavior of this right-wing party in the latest budget compromise is symptomatic for this right-wing swing. Only 87 republican representatives followed their spokesperson Boehner and voted to raise the debt ceiling. The majority of the party refused the “moderate” party leadership.

A recently published poll of the Pew Research Center verifies the schism in the US rightwing. The “positive evaluation” of the right-wing extremist Tea Party movement among moderate republicans fell from 46 percent in June to only 27 percent. The approval ratings of the new shooting star of the extreme American right-wing, the Texas senator Ted Cruz, deteriorated within the moderate republican camp. Four months ago only 16 percent had a negative view of his work; now 31 percent have a negative opinion. On the other hand, Ted Cruz seems to have established himself as the new leader among followers of the Tea Party. Around 74 percent of the extreme right-wing judges positively the policy of the Texan senator who led the fight of the right-wing against Obama’s health reform in the latest budget conflict; four months ago they were only 47 percent.

RIGHT-WING EXTREMIST PARTS OF THE REPUBLICAN PARTY ARE OUT OF CONTROL The Washington Post recently made drastic comparisons to illustrate this continuing right-wing development in the Republican Party. The Tea Party carries out regular “purges” reminiscent of the elimination of oppositional forces during the great Stalinist show-trials.

Like the Stalinists and Jacobins, the fanatics of the Tea Party have purged their movement – not through executions but by banning all republicans who do not share their enthusiasm for scrapping the country if they cannot get the majority to follow their convictions.

According to this extremist logic, there are “fewer but better republicans” today, the Washington Post said. One obvious symptom for this continuous development consists in the distancing of the right-wing from the past leaders of the party who now are regarded as too “weak or soft” and willing to compromise. The “hard right-wing core” sees politicians like former president George W. Bush, the presidential candidate Mitt Romney and republican senator McCain as “irritating remnants of a compromising past.”

Instead figures like Ted Cruz, Rand Paul, Michele Bachmann and the inevitable Sarah Palin are extolled.

The arguments between the moderate wing of republicans and right-wing hardliners were clear in the repeated calls by American economic associations to end the right-wing

blockade. Important economic financiers of republicans like the US Chamber of Commerce, the National Association of Manufacturers and the National Retail Federation pressed unsuccessfully for an end to the latest budget strife. Thus a right-wing extremist part of the Republican Party is manifestly out of control.

Meanwhile some of these economic associations even suggest financing rivals of Tea Party politicians to break their dominance. Today’s republicans express “resentment” that haunts an alarmed white middle class and no longer speak “for Wall Street or Main Street,” the Post concluded.

CRISIS IDEOLOGY OF THE FRAGILE WHITE MIDDLE CLASS The new arising ideology of the extreme American right-wing represents a regressive and irrational processing of crisis fears that is enriched by an increasing racism in the eroding US middle class. In hatred toward the US government felt to be “all-powerful,” the powerlessness appears that seized many American suburbs given the uncontrollable crisis dynamic and the social devastations going along with that.

The Tea Party wants to return to an idyllic past that really never existed. The Tea Party wants to stop the accelerating descent of the while middle class by driving the ideological conceptions existing in this “middle” to the extreme. The irrational exaggeration of the neoliberal litany of personal responsibility will to performance, entrepreneurial spirit and skepticism toward government is actually the core of the Tea Party ideology.

In a classical “extremism of the middle,” the worldview ideas prevailing in the mainstream are pushed to the extreme that seize the US right-wing in reaction to the crisis dislocations of the US right-wing. What all of a sudden hostilely faced the US economic associations in their own traditional party is the extreme result of neoliberal indoctrination that was urged for decades by these economic associations. The Tea Party does not use the polemic against tax hikes and “big government” purely tactically to gain tax- and location advantages as American economic lobbies do. The right-wing hardliners really believe capitalism could be reanimated if the state were shattered as much as possible and all necessities of life simply left to the affected people.

“There is no society; there are only individuals.” The Tea Party wants to practically realize this slogan from Margaret Thatcher. In addition a resurging racism manifests in this white middle class that cannot come to terms with the demographic changes in the US.

Consequently the assessment that Obama is the great winner of the latest trial of strength can only conditionally be maintained. Obama successfully resisted an offensive of the right-wing. Because of their extortion strategy, republicans must accept enormous losses of popularity that could have effects on the coming elections.

LONG-TERM RIGHT-WING SHIFT OF THE ENTIRE POLITICAL SPECTRUM However representatives of the extreme right-wing are also regarded as the great winners of the budget conflict. The Wall Street Journal sees a “hero of the Tea Party right-wing” in Texas senator Ted Cruz who helped escalate the latest budget feud and has now created a “platform for his presidential candidacy.” On the other hand the moderate John Boehner has been “clobbered by his own fraction.” The Wall Street Journal asks “how he can keep his job.”

Thus an extremist right-wing is growing that could act as a central political rallying point for fallen and frightened members of the middle class in a future crisis. The “extremism of the middle” practiced in this movement could become a dominant crisis ideology and make possible a similar ascent of right-wing extremist parties as is happening in Europe.

Finally a “victory” of democrats must be set in the context of a long-term right-wing shift of the whole political spectrum in the US. The entire social climate in the US has fundamentally changed since the “neoliberal” revolution triggered by Ronald Reagan in the 1980s. The policy of the “democratic” President Obama for example still maintains the Guantanamo prison and carries out a global program of extra-legal killings by a high tech drone fleet. The right-wing may have lost a battle but it has long won the war. The neoliberal capitalist ideology – like the capitalist economy – has long won a totalitarian victory against all dissonance or deviation. Now that ideology breaks up in its contradictions and passes into open irrationalism and mania.

Still this is really not a genuine American tendency. The United States functions on account of advanced crisis processes (as in the de-industrialization of enormous regions) only as an early indicator making the US an ideal projection surface for resentment.

Similar processes of a long-term right-wing shift of the whole political spectrum are occurring in Germany [cf. “The New Middle is Right-Wing”] where the alternative for Germany is ultimately stylized as a German “Tea Party.”

ADDICTED TO LIQUIDITY INJECTIONS

by Tomasz Konicz Bernanke's announcing of lower monthly printing of money was enough to make stock exchanges collapse in many threshold countries. The monetary policy of printing money and zero interest is caught in a vicious circle. Liquidity glut generates credit growth.

Politics has fought the symptoms of the great crisis with banking- and economic packages while its systemic causes remain untouched… The hardest phase of the great crisis is ahead of us, not behind us. All sectors try to safeguard their position through spending cuts...

Central banks have long been hostages of their expansive monetary policy [This article published on 7/9/2013 is translated abridged from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/39/39475/1.html. Tomasz Konicz is the author of “The Crisis Explained” and “The End of the Golden Age of Capitalism and the Rise of Neoliberalism” (cf. http://www.freembtranslations.net).]

It was a typical European compromise with the European Central Bank reacting to the latest crisis attack in the Eurozone. At the beginning of July, the European Central Bank presidentMario Darghi declared that the key interest rates in the Eurozone would remain permanently at a very low level of 0.5 per cent. “The council expects the important European Central Bank interest rates to be at the current level or below for a long time,” Darghi said. [1] The European Central Bank wanted to lower the key interest rate to 0.25 percent but could not prevail in the European Central Bank council against the German resistance. [2] In Germany there will soon be elections. Lower key interest rates are very unpopular.

The announcement of a permanent low key interest rate that is still higher than the interest rates in the US should calm the pensions- and financial markets in the Eurozone.

A government crisis in Portugal, renewed demands for another debt cut in Greece, falling stock prices all over Europe and a generally rising interest level in the southern periphery of the Eurozone make likely a flaring up of the debt crisis. The European Central Bank wards off the danger of a new Extensive European fire with the announcement of an unlimited continuance of its low interest policy – at least in the short-term. The interests in southern Europe decline slightly; the stock markets recovered a little. Investors knew that “the European Central Bank was ready in an emergency with its bond purchase program to prevent an escalation,” an analyst explained to the n-tv news broadcast station. [3] This means market actors rely on the headd of the European Central Bank Darghi's famous promise “to do everything tomaintainn the Euro” in an intensified crisis.

This involves printing money and increasing the money supply by purchasing bonds

(debts) for a short-term stabilization of the system. The additional liquidity glut acts as an economic stimulant that lowers interests, raises stock prices and stimulates awarding credits.

DOUBLE BLOW IN MONETARY POLICY The latest European crisis was triggered primarily by the announcement of the American and Chinese central banks [4] to stop buying bonds which Washington and Peking carried out for quite a long time. On June 19, 2013 Fed chairman Ben Bernanke announced the gradual end to the monthly purchases of bonds in the volume of $85 billion executed under the term quantitative easing 3 (QE). Bond purchases will be reduced “later in the year” since the economy in the United States is gradually recovering, Bernanke explained. Only one day later the Chinese Central Bank signaled it would not pump any more liquidity in the overheated Chinese financial market. The financial institutes should manage their liquidity better in the future, plan spending better and hold ready sufficient funds, according to the official opinion of the Central Bank. All hell broke out on the global financial markets after this double blow in monetary policy.

The Chinese financial sector passed into a short-term shock paralysis while stock prices collapsed worldwide and the interest-burden of the southern European crisis states soared. Interests on the so-called inter-bank market shot up in double digits because the banks did not want to grant any short-term credits to one another any more. In the US the previous capital outflow from the bond markets intensified to a “stampede,” [5] a wild uncontrolled escape (German word: Fluchtbewegung) in whose wake the interests for US government bonds rose quickly. [6] This has been very disastrous in the threshold countries. Bernanke's announcement of a possible lowering of the past monthly printing of money – the key interest rate should remain at the historically low value of 0.25 percent – was enough to make stock exchanges collapse in many threshold countries that massively raised their interest level [7] and encouraged a quick devaluation [8] of the currencies there. These shocks in the semi-periphery of the capitalist world system were triggered by capital outflows that accelerated after Bernanke's announcement.

The methods by which the central banks brought these dislocations on the world financial markets under control again are typified for the late capitalist world system. Ultimately the currency guardians carried out a change in monetary policy given the escalation within the shortest time. [9] Both Chinese and American central bankers declared they would supply additional liquidity to markets to suppo9rt economic growth. The withdrawal of the Fed and the Chinese central bank on June 25, 2013 led immediately to a calming of the situation on the financial markets [10] that previously seemed to be losing control. During a June 27 press conference [11[, William C. Dudley, president of the New York Federal Reserve, explained that the Fed in the future could even expand bond purchases if the economic development lags behind the forecasts of the central bankers.

ZERO INTEREST POLICY IS OUT OF ORDER As a result the central banks launched a first attempt to end their permanent printing of money but were surprised by the furious market turbulence and turned back. Thus capitalism in its old days seemed to be like a credit junkie who can only maintain his functioning thanks to permanent liquidity injections of the central banks. The Fed already carried out the third Quantitative Easing (QE3) since the 2008 outbreak of the crisis that unlike the two preceding programs was not temporally limited. Printing money should continue until there is substantial improvement on the US labor market. In the meantime the system is absolutely “addicted” to these regular liquidity injections, the British Telegraph journal commented on June 20, 2013. [12] “In the wake of the credit crunch, the West discovered quantitative easing – printing money by purchasing securities from banks and other private institutions – as a way to stimulate the economic recovery. Soon we became dependent on that. Now the Fed announces it will end this bad habit... However the panic on the stock markets triggered by the American intimation of a possible withdrawal from the QE … shows that the economic recovery is fragile and depends greatly on “government intervention.”

How did this dependence of the capitalist system on “government intervention,” on ever new “quantitative easing” come about? The zero-interest policy practiced by most central banks since the outbreak of the crisis does not function any more so the “dose” must be increased. The Frankfurter Allgemeine Zeitung newspaper formulated: [13] “The American Central Bank began to increasingly buy up government bonds in the course of the financial crisis since the interests were practically at zero and the economy was still not robust. The state of indebtedness was relieved while a different goal was pursued: forcing down interests for government bonds and credit interest since its own key interest rates cannot be lowered any more.”

ILLUSION OF ECONOMIC RECOVERY In the final analysis reanimating the awarding of credits and enlivening the economy altogether is emphasized with this expansive monetary policy. The US Federal Reserve since the eruption of the crisis has actually practiced an absolutely unique printing of money. [14] Its gigantic dimensions can be read off the balance sheets of the Fed. What amounted to around $800 billion before the beginning of the financial crisis in 2007 exploded in the meantime to $3.4 trillion. That is $3400 billion. In the last months the expansive US monetary policy contrasted with a reduction of the balance sheet total of the European Central Bank. [15] which did not recently initiate any programs of printing money. This monetary policy reserve – beside the German austerity dictate in Europe – contributed to the stubborn recession in the Eurozone. “Without the Fed the world economy would already have fallen into a deflationary spiral,” the economic blog

Querschusse diagnosed.

The capitalist monetary policy that for six years consisted in continuously printing money and zero interests as a “state of emergency” [16] congealed into normality is caught in an absolutely vicious circle. The liquidity glut generates a credit-driven growth. In the threshold countries around four trillion dollars flowed in speculative profit-hungry capital that expected higher profits than in the centers of the capitalist world system. However these short-term credit-financed upswings are bought with increasing medium-term instability and with the formation of new credit- and speculation bubbles. Even the American housing market now experiences a slight recovery phase [17] with double-digit growth rates in housing prices.

The constant injections of ever new “liquidity” first allowed the illusion of an economic recovery to arise that was reason for Ben Bernanke to suggest an end to printing money.

However the serious dislocations on the financial markets after June 19 indicate very clearly that this is really a mirage generated by printing money. As soon as an end of quantitative easing appears on the horizon, a collapse of the house of cards on the financial markets threatens which will lead again to an economic crash in recession.

The underlying idea of this policy is that the capitalist economic motor only needs a kind of monetary policy booster through quantitative easing to get going again is made a fool here. Obviously the system only maintains its functionality by printing money and zerointerest policy since the collapse of the gigantic real estate bubble in the US and Europe.

THERE IS NO SYSTEM-IMMINENT WAY OF MONETARY POLICY OUT OF THE CUL-DE-SAC Rising interests in the center of the capitalist world system would strangle the global economy [18] and bring the apparent successful history of threshold count5ries in the semi-periphery to an abrupt end. Many industrial countries would also collapse under the quickly increasing debt burden. Since the outbreak of the debt crisis, the indebtedness in metropolitan areas has also exploded, as the FrankfurterAllgemeiner Zeitung newspaper noted [19]: “The private and public indebtedness [according to the Bank for International Settlements (BIZ)] has increased around $33 trillion since 2007 in the leading 18 economic countries.” This means the heroic struggle of capitalist crisis policy against the debt crisis in the industrial states alone produced a huge additional debt mountain of $33,000 billion within the last six years.

There is actually no system-immanent way of monetary policy out of this cul-de-sac.

Bernanke only has the choice between printing more money together with a zero-interest policy or a gigantic financial market crash that would drive the world economy to the abyss of a depression. The central banks of China and the US actually only try to continue the finance market-driven deficit by means of massive state support and boundless printing of money. These deficit economies were made possible by the proliferating real estate markets before the financial crisis of 2007.

This hopelessness of capitalist monetary policy that was the hostage of the liquidity glut that it kindled is only an expression of the contradictions of the capitalist mode of production intensifying for decades [The End of the Golden Age of Capitalism and the Rise of Neoliberalism (20)]. It is a manifestation of a capitalist work society collapsing in its hyper-productivity that can only maintain a kind of zombie-life through a permanently increasing money- and credit-expansion [The Crisis Explained (21).

Links [1] http://www.spiegel.de/wirtschaft/unternehmen/ezb-draghi-verspricht-dauerhaft-niedrigezinsen-a-909493.html [1] http://de.wikipedia.org/wiki/Datei:Federal_Reserve.jpg [2] http://creativecommons.org/licenses/by-sa/2.5/deed.de [2] http://www.spiegel.de/wirtschaft/soziales/ezb-weidmann-kaempft-gegen-politik-derniedrigen-zinsen-a-909863.html [3] http://www.n-tv.de/wirtschaft/Rueckkehr-der-Euro-Krise-loest-keine-Panik-ausarticle10930471.html [4] http://online.wsj.com/article/SB10001424127887323300004578557333896965450.html [5] http://dealbook.nytimes.com/2013/06/24/exit-from-the-bond-market-is-turning-into-astampede/ [6] http://www.usatoday.com/story/money/markets/2013/06/24/bond-market-bubble-may-bebursting/2451523/ [7] http://www.businessinsider.com/the-brazilian-bond-market-massacre-in-one-huge-slide2013-6 [8] http://online.wsj.com/article/SB10001424127887324637504578565640677242564.html [9] http://www.dw.de/china-central-bank-allays-liquidity-fears-lifts-shares/a-16904152 [10] http://www.reuters.com/article/2013/06/25/markets-global-idUSL5N0F02Y820130625 [11] http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/27/n-y-fed-president-tomarkets-you-got-it-wrong/ [12] http://www.telegraph.co.uk/comment/telegraph-view/10132308/Business-as-usual.html [13] http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/ausstieg-aus-den-anleihekaeufen-

wie-die-amerikanische-notenbank-uns-alle-trifft-12237571.html [14] http://www.querschuesse.de/fed-aggressive-aufblahung-der-bilanz/ [15] http://www.querschuesse.de/wp-content/uploads/2013/06/6a11.jpg [16] http://www.n-tv.de/wirtschaft/Sanfter-Ausstieg-oder-jaehes-Ende-article10920886.html [17] http://www.washingtonpost.com/business/economy/home-prices-new-home-sales-showbig-increases/2013/06/25/812f61c2-dd9b-11e2-948c-d644453cf169_story.html [18] http://www.nytimes.com/2013/06/23/business/emerging-markets-hitting-a-wall.html [19] http://www.faz.net/aktuell/finanzen/anleihen-zinsen/zinswende-steigende-renditen-inzeiten-stark-steigender-staatsverschuldung-12242899.html [20] http://www.heise.de/tp/artikel/29/29184/1.html [21] http://www.heise.de/tp/artikel/36/36123/1.html [22] http://www.heise.de/tp/ebook/ebook_3.html RELATED LINKS: Reuter, Norbert, “Growth Euphoria and Distribution Reality” http://freembtranslations.net/2011/growth-euphoria-and-distribution-reality-by-norbertreuter/ Ulrich, Peter, “Economic Ethics After the Crisis” http://freembtranslations.net/2011/economic-ethics-after-the-crisis-by-peter-ulrich-andvideo-systemic-malfunctioning-of-the-labor-and-financial-markets-heiner-flassbeck16min/ Vogt, Joseph, “Demystification of the Market” http://freembtranslations.net/2011/the-diabolical-hand-joseph-vogt-on-thedemystification-of-the-market/

CLOUD-SOURCING AND CLOUD-WORKING: BRAVE NEW WORLD OF WORK

by Tomasz Konicz "Nothing is more absurd than to try to enforce capitalist property relations within the expanse of the World Wide Web.. In the ideal case, the competing persons in the asocial networks should become part of a `cloud' of living workers.."

How the technologies of Web 2.0 completely change our working life

By Tomasz Konicz [This article published in the German-English cyber journal Telepolis 8/13/2012 is translated abridged from the German on the Internet, http://www.heise.de/tp/artikel/37/37431/1.html.]

Humanity under capital is like the famous sorcerer’s apprentice who could not control the spirits that he conjured. If these spirits are first fully incorporated in the process of capital exploitation, humanity’s greatest achievements and inventions may be turned against people and grow into a hostile and insurmountable power that makes life into hell for all wage-earners through market-mediated objective “practical necessities.”

This tendency of capitalist rule – on whose foundation the middle class ideologies of culture pessimism and hostility to progress flourish – also characterizes the contradictory Internet which on one hand promotes an enormous thrust of globalization and rationalization of capitalist goods production and on the other hand seems to already transcend the capital relation by its inherent structure. Nothing is more absurd and nonsensical than to try to enforce capitalist property relations within the expanse of the worldwide web. The windmill battle of politics and the culture industry over enforcement of “copyright” can only continue through mutilation of the free flow of information on the net. That battle was an important impulse in the formation of the European “pirate parties.”

Beyond the sphere of digital and immaterial goods, the interweaving of Internet 1.0 [1] (which facilitated the passive use of the new information- and communication channels) first made possible the tremendous dynamic of the globalization of capitalist goods production in which the global production chains could be built and successfully coordinated to an unparalleled extent. The rationalization-advances enable an intensified global predatory competition to spread in most industrial branches. In the scope of the neoliberal offensive of the past decades, an extensive transformation of working life and an intensification of performance pressure went along with that competition.

By comprehensive flexibility of the flow of work, a decentralization of production, the melting of core personnel and the corresponding development of a class of precarious day-laborers, many German corporations successfully reacted to the increasing predatory competition on the world market. Embedded in the whole society, the first phase of this web-based transformation of working life in the total neoliberal mobilization of society with the help of economic interests – all resources and social areas of the nation ideologized as a “performance community” are forced into service of the increasing world market- and location-competition in the framework of this totalitarian economism.

However the basic structures of working life remain largely untouched. The large majority of wage-earners set out every morning on the way to their physical job in a plant, office complex or another institution beyond their dwelling. The separation between the private sphere of wage-earners and working life continues. Despite all waves of precariousness, dependent job conditions dominate the world of work in today’s late capitalism.

The quickly growing temporary work branch in Germany involved forms of dependent paid labor codified with work contracts. In crisis-shaken capitalism, paid labor is still performed in jobs outside the private sphere as was the case since the acceptance of industrialization. But all this may be up for discussion because the coming upheavals could degrade the past rationalization- and globalization-advances to a mere prologue.

IBM AS TRAILBLAZER OF WEB-BASED PRECARIOUSNESS In a careless moment in April 2010, IBM-CEO Tim Ringo showed where the development was heading when he discussed a reduction of the personnel of the IT-giant from 400,000 worldwide to only 100,000 employees by 2017. This could be realized by applying the web-based rationalization-strategy of crowd-sourcing. He spoke [2] with the technical journal “Personnel Today.” “There will be no building costs, no pensions and no costs for the public health system which means enormous savings,” Ringo raved.

With this crowd-sourcing, an activity originally occurring within the firm is shifted to a group (crowd) of precarious wage-earners or small businesses that perform this activity in a project-referring way in competition with one another as soon as the firm’s leaders announce this (in capital-jargon as a “call”). In the interview, Ringo also made clear that the 300,000 IBM-employees earmarked for release will not be really “fired” since they could be re-hired as “contractors.” “I think crowd-sourcing is very important. You have a core of stable employees while the large majority is outsourced. This very frank effort of the corporate personnel manager in April 2010 was immediately denied. IBM is now implementing this concept with the first flexibility offensives.

At the beginning of February, press reports [3] about massive planned job cuts for IBMGermany transposed the personnel of the IT-firm into absolute nervousness. Up to 8,000 of the 20,000 IBM-employees in Germany will lose their jobs in the next years. This leaked out from top managers to the trade paper Handelsblatt.

The business leadership was silent about the queued-up deforestation for a whole month until IBM-Germany CEO Martina Koederitz issued a half-hearted denial on March 1. [4] The reports about personnel deforestation were “speculative.” “At the moment” the firm did not plan any mass terminations. On March 30, the denial of the denial followed when Koederitz addressing the job cuts in a conversation with VDI-news insisted [5] on “testing new future technologies” that “could make the future work environment smarter, more intelligent and more flexible.” IBM began “developing home work” in the 1980s, the IBM-CEO said.

The executive caste of the high tech corporation cultivates an elitist self-image in which IBM is stylized as a trendsetter of new business strategies and work structures that could then be adopted by the whole branch. This ideology of permanent innovation in which IBM must “reinvent” itself again and again is grounded in the successful transformation of the business from a hardware manufacturer to a very profitable software- and serviceconcern. In this regard, “Big Blue” is regarded as a model in the branch. The crisisplagued hardware group HP is carrying out a transformation similar to IBM by means of a massive wave of dismissals. [6] Thus the Damascene’s sword of mass terminations is suspended over the German IBM personnel. Koederitz did not give the exact number of employees since this was allegedly hardly possible given the extreme global linkage of the corporation. The reference of the German IBM-CEO to “home working” in whose development IBM was responsible offers a view of the future of the present workforce if corporate leadership prevails. The latest web-techniques could produce a class of precarious day-laborers whose dwellings and jobs merge.

THE LIQUIFICATION OF WORKING LIFE The organization model called “Liquid” [7] includes a massive flexibility of the flow of work and its “more fluid organization” [8] managed through shifting fields of activity to external service providers, especially free co-workers. The multitude of operationally exploited workers – like the necessary workers – should adjust to the demands of the corporation for liquidity or flow. Thus the liquid-concept represents the perfecting of the neoliberal dream of the “breathing business” that can hire and fire paid labor on whim.

What is new in this concept is that organization structures of the Internet should be massively transferred to the flow of work of the IT branch. The Internet seems to step out of the digital sphere and “materialize” in the reality of the working life in its structures.

Internet 2.0 [9] is marked by the activity of net-actors. The “swarm” is its central actor.

The “social network” forms its essential communication platform; the cloud (data cloud) is considered its central structural characteristic. These characteristics of Web 2.0 – the “swarm,” the social network and the cloud – should be transferred to the world of work.

The fundamental difference to the restructuring thrusts in the “passive” Internet 1.0 should be emphasized to fully grasp the extent of the threatening wave of precariousness.

Internet 1.0 played a structurally passive role in the past globalization pushes because it only quantitatively modified and expanded the existing structures of company organizations. Internet 1.0 made possible a greater range of operational organization, acceleration of the exploitation process, greater efficiency gains and potential savings.

On the other hand, Web 2.0 actively contributes to the structural dissolution and defibration of the given company structures as foreseeable in IBM’s liquid concept. In the future, “Big Blue” will write out many software projects on its own Internet portals (Liquid Portal) where certified free software developers can “recruit” for projects announced by IBM. IBM collaborators can “offer” new contracts on these “project exchanges” – that will serve as a kind of eBay of paid labor.

This has already been practiced for some time by the so-called “Liquid Community” [10] on a small scale in businesses. IBM already made its first internal experiences with crowd-sourcing. 7,000 IBM co-workers had free time accounts that “fit this new working method exactly,” as IBM vice-president Patrick Howard raved in August 2011. [11] “We make 30 percent faster deliveries with 20 percent higher quality and 33 percent lower costs in 30 months.” If this massive flexibility and precariousness of the work organization should be successful, the liquid-concept already applied in beginnings will be carried out throughout the corporation.

With this “external” crowd-sourcing, the Internet portal Top-Coder [12], specializing in project-based job mediation with 400,000 free programmers as users will become more important. The programmer uploads a profile of his/her skills to join the general competition for contracts. IBM is described as a “liquid resource” in business jargon. The corresponding portal is like Facebook but the skills of employees certified by IBM and their past performance ratings can be seen there.

IBM will popularize this kind of web-based day-laborer center in the entire branch.

Corresponding portals will be built and offered to other firms for a fee which will be another source of revenue. Future IBM project-leaders from the core personnel could simply “click together” their free co-workers from different portals for a project – just as we compile a list of favorites or shopping lists on Internet portals.

WORKING IN THE CLOUD The social network – idealized by the media since the eruption of the “Arab Spring” as a means of human emancipation – changed in its annexation in the exploitation process to an “asocial network” that puts competition and exploitation on a new level. In a terrible irony, the social network is misused to intensify the competition-mediated isolation of wage-dependent monads whose dwellings also become workplaces.

The keyword “Cloud Working” [13] makes the rounds in the branch to conceptualize the possibilities of Web 2.0 from an operational perspective. With the IT-term “cloud,” the data, programs and services are described that a user keeps on the Internet – through webbased E-mail clients, social networks, video-portals, photo- and music-services and so

forth. Each of us leaves behind a cloud of personal data on the Internet. In the ideal case, the competing persons in the asocial networks of paid labor should become part of a “cloud” of living workers who fluctuate around the core personnel of a concern dependent on the economy. This “human cloud” of free co-workers remains “docked” to the businesses by means of sub-firms, job portals and corresponding certifications.

A regular defibration of business structures that lose clarity and contours goes along with this process. In the future, many flows of work will be written out in the form of “open calls” on a project-basis to these day-laborers in the “human cloud” that wait on these calls like a “swarm” and offer their solutions to the corporation in competition with each other. A “swarm of capital” [14] could be created that makes possible enormous efficiency gains. The system is oriented to direct, global competition in which the location of individual could-members is irrelevant. Therefore the IBM leadership considers introducing global work contracts. IBM-Germany CEO Koederitz says the exact number of IBM workers in Germany cannot be known on account of the global linkage of her company.

These reflections are products of the neoliberal appeal to the “personal responsibility” of wage-earners. Wage-earners would actually become “self-entrepreneurs” who now have to pay for all the prerequisites of their paid labor: training, health care, pensions, jobs, work equipment etc – while the competition intensifies and the form of homework could greatly hinder the organization of resistance.

In Germany, there are the first attempts at building “Human Clouds.” The portal Clickworker.com [15] already has 100,000 users including text providers and Internet researchers. No wonder IBM personnel director Ringo was so excited in 2010. The journal Personnel Today that interviewed Ringo told of a gigantic macro-economic potential for these new forms of precarious web-based work-mediation in the US: “Out sourcing experts explained that employers in the private and public sectors are considering this model to cover personnel costs in the wake of the recession.”

Nearly all forms of office work – and many services – could be moved into the “cloud.”

The short film “No Cloud Cuckoo Land” [16] produced in the commission of the Verdi union describes what such a precarious “brave new world of work” would look like. The film develops a future scenario where wage-earners in most branches would be prepared to be cloud-workers.

WEB-BASED CONTROLS OF INTERNET DAY-LABORERS This desired informality of the new Internet proletariat is a blessing and curse at once for businesses. Renunciation on a job together with stable employment, office space, social security contributions and work preparation means no obligation, loyalties or other feelings of connection on the part of the new digital precariat. Consequently an identification of the day-laborer with the concern – that commonly creates a specific corporate identity – is not possible any more. Even the core personnel have a very hard time ensuring the reliable cooperation of the day-laborers and quality controls of the

consigned work.

Toward the end of the respective “project,” a “cloud worker” finds him/herself unemployed again in the clouds so the usual incentives for the continuous career course no longer take effect. The extensive group-conditioned control of employees on the job mirrored in the transparent architecture of many glassy postmodern office-towers obviously cannot be maintained any more with the isolated monads in the web-based swarm of capital and must be replaced by other web-supported forms of disciplining and performance rating…

THE “SELF-ENTREPRENEUR” N THE PEOPLE CLOUD A pressure to transparency is the basis of web-based work control. The precarious Internet-proletariat must “show” their skills and certifications on public job portals like Top-Coder…

Parallels could be drawn to the ratings of online mail-order businesses like eBay or on price comparison portals. This is consistent with the framework of late capitalist economism. The all-pervasive demand for transparency is also true for the precarious “self-entrepreneur”… The “employer” becomes the “customer” of the self-entrepreneur.

The neoliberal trans-valuation of all values in the world of work necessitates this.

Another means of control in the brave new world of work of Web 2.0 is the process of continuing education and gaining new skills that raise the price of the commodity labor power of the cloud-worker. The Internet proletariats offering their talents on web portals must prove that these skills can be actually applied. This happens through the process of certification in which workers take special courses or examinations…

THE BATTLE OVER THE INDIVIDUAL OR HUMAN CAPITALISM Finally the individual is another central battleground of the new control techniques. If the whole society was subordinated to economism in the course of the first phase of the neoliberal rollback, the imperative of capital exploitation should be anchored as deeply as possible in the consciousness of individual persons to mobilize their reserves in performance and creativity. The totalitarian internalization of the capital imperative should complete the web-supported monitoring and quality controls and open up new fields of exploitation for crisis-prone capitalism.

In a guest article [20] for Spiegel Online, Henrik Mueller, the editor of Manager Magazine, wrote: “The really scarce factor is not capital but creativity – human capital in its most beautiful form. The West will only overcome the present crisis when free societies learn to overcome this scarcity.” Mueller urged a “human capitalism” that sets the person in the center.

In a conversation with Deutsche Welle [21], film director Carmen Losmann described how inhumanely the new human capitalism drills persons on the top floors of

management pyramids today. A view of the person that imagines the person as a “selfoptimizing resource” prevails in the milieu of human resource-management. In her documentary film “Work Hard – Play Hard” [22], Losmann impressively dove into the world of transnational corporations and rating firms. Procedures reminiscent of brainwashing adjust the whole striving of wage-earners to the optimal exploitation of their performance resources.

This management training drives the estrangement characterizing the capitalist work process over the edge by seemingly abolishing it. The imperatives of the heteronomous capital exploitation forcing persons to their treadmills are stylized as the maxims of autonomous striving. A “very subtle re-interpretation of personal development” occurs.

This process has “partly Fascist tendencies,” Losmann explains. [23] By means of a pseudo-private work environment and corresponding techniques of human resource management, wage-earners should be completely wrapped up in striving to reach the business goals and interpret this as personal responsibility and self-control.

Future generations of wage-earners should internalize this slogan “We are capital.” In the film, one of the capital robots entrusted with creating this capitalist “new person” describes this intended change of mentality as a long-term process: “We want the right person. If we don’t accomplish this rightly, there will be nothing in ten years. Processes and structures can change quickly. But attitudes and conduct last.”

The film critic Jurgen Kiontke illustrated the result of this brainwashing [24] in a review of the Losmann-film on the union portal Gegenblende: “The people in this film are dead but don’t know it. Foreign control is not necessary any more. The people here work in a `task-oriented’ way and control themselves.”

Concepts of “self-optimization” – as already drummed into the heads of business administration students – are obviously driven to the extreme. The techniques of selfdenial, self-control and self-optimization hatched in the laboratory of “human management” should become prerequisites of paid labor in a modified form in all spheres of the work society.

The hosts of precarious workers and “cloud workers” reflect forms of self-optimization while the concentrated core personnel are subjected to a performance-optimizing brainwashing as shown in “Work Hard – Play Hard.” With this pressure for internalizing its imperatives in individuals, capital carries out a fundamental reinterpretation of terms that reaches Orwellian dimensions: self-exploitation becomes self-realization and selfcontrol becomes freedom.

INTERNET CAPITALISM AS A CRISIS-REFLEX How can the person – including his private sphere – move to the center of the concepts and strategies of accumulation optimizers in the rating firms? In his guest article for SPON, Henrik Mueller referred to this when he described “human capital in its most beautiful form” as the most important factor that could help master the present crisis.

Capital’s access to the innermost part of the person is a crisis reflex like the orientation of the whole society in the guidelines of the increasingly stuttering capital exploitation in the past years. The capital relation reacts in an extremist way to its crisis by pushing it to the extreme. The degradation of the entire society to an “economic location” in the scope of economism gave corporations and states concrete advantages in the crisis-conditioned predatory competition of the past decades as the dominant position of Germany in Europe illustrates. After the totalitarian subjugation of all social areas, only the innermost part of the person is left as the last expansion field to escape the crisis dynamic. An extremist flight of the capital relation from the consequences of its exploitation movement occurs (Who is responsible for the eruption of the crisis? [25]) The person within the capital relation is in a permanent “race with the machines” [26] whose permanent evolution opens up ever greater potential rationalization. The more technological progress makes superfluous human labor in the production process, the more intensely regular working conditions and wages come under pressure.

Precariousness and recall of the last performance reserves by means of self-optimization are the mechanisms with which an increasingly shriveling number of wage-earners are kept “in work.” Labor must become cheaper and more productive to temporarily survive in the “race with the machines.”

On the other hand, those activities in which genuine human skills and proficiencies are indispensable are excluded from the rationalization pressure. Therefore the interest of the personnel divisions in the private sphere or in the character of wage-earners increase especially with the core employees. With the core personnel, management wants access to the whole person because “humanliness,” the most important quality that cannot be produced technically, should be commodified. From the re-programming of the human striving for personal development in the sense of capital exploitation, creativity advances should result that open up new exploitation fields to crisis-plagued late capitalism. Under total mobilization of his/her innermost reserves, this “new person” who completely merges in his function as a little cog should point the way out of the crisis to capital suffocating in its own productivity.

This crisis of the capitalist work society triggered by productivity gains [27] will lead to the breaking apart of the labor market in a precarious mass of self-optimizers and a small elite of brainwashed core personnel. In this barbaric form, capitalism can only delay its collapse that is reminiscent of the dystopias of a George Orwell or Aldous Huxley.

In the end, the homework of late capitalism recalls the homework of early capitalism as practiced in the English textile industry in the 17th and 18th centuries in which home artisans produced textiles for overlords who then purchased and marketed them. By means of paid labor, early capitalism intrude3d in the houses of people before it drove them into the factories. Late capitalism will deliver the future Internet day-laborer to his/her own four walls.

LINKS

[1] http://en.wikipedia.org/wiki/Web_1.0 [2] http://www.personneltoday.com/Articles/23/04/2010/55343/ibm-crowd-sourcing-couldsee-employed-workforce-shrink-by-three-quarters.htm [3] http://www.heise.de/newsticker/meldung/Bericht-IBM-plant-Stellenabbau-inDeutschland-1426534.html [4] http://www.derwesten.de/nachrichten/koederitz-kein-flaechendeckender-stellenabbaubei-ibm-deutschland-id6416552.html [5] http://www.vdi-nachrichten.com/artikel/IBM-Deutschland-Chefin-Das-ist-eineeinmalige-Position-die-wir-haben/58004/1 [6] http://www.heise.de/jobs/meldung/Hewlett-Packard-setzt-27-000-Mitarbeiter-vor-dieTuer-1583134.html [7] http://www.techteam.com/careers/join-the-liquid-challenge-program [8] http://www.handelsblatt.com/unternehmen/it-medien/schrumpfkurs-mit-dem-programmliquid-will-ibm-geld-sparen/6135510-2.html [9] http://en.wikipedia.org/wiki/Web_2.0 [10] http://www.silicon.de/41558569/ibm-community-statt-festanstellung/ [11] http://www.ich-bin-mehr-wert.de/w/files/ibm/verdiatibmweb-201112.pdf [12] http://www.topcoder.com/ [13] http://www.ich-bin-mehr-wert.de/w/files/ibm/verdiatibmweb-201112.pdf [14] http://www.taz.de/!91173/ [15] http://jungle-world.com/artikel/2012/15/45242.html [16] http://www.clickworker.com/de [17] http://www.personneltoday.com/Articles/23/04/2010/55343/ibm-crowd-sourcing-couldsee-employed-workforce-shrink-by-three-quarters.htm [18] http://www.verdi.de/themen/arbeit/++co++fd9e2f52-82fe-11e1-5004-0019b9e321e1 [19] http://www.successfactors.com/homepage.html

[20] http://www.ksri.kit.edu/Default.aspx?PageId=818 [21] http://www-304.ibm.com/jct03001c/services/learning/ites.wss/de/de? pageType=page&c=a0003513 [22] http://www.spiegel.de/wirtschaft/soziales/kommentar-billige-ezb-hilfen-koennen-deneuro-nicht-retten-a-827853.html [23] http://www.dradio.de/dkultur/sendungen/thema/1728076/ [24] http://www.workhardplayhard-film.de/ [25] http://www.heise.de/tp/artikel/36/36747/1.html [26] http://www.gegenblende.de/++co++34a89612-8562-11e1-6f68-001ec9b03e44 [27] http://www.heise.de/tp/artikel/37/37150/1.html [28] http://www.heise.de/tr/artikel/Der-Wettlauf-mit-den-Maschinen-1370433.html [29] http://www.heise.de/tp/artikel/36/36123/1.html

THE SCHISM OF 2013 The heated public discussion of the pope’s capitalism criticism reveals this is ultimately a conflict about religion. Capitalism as a secularized religion. Part 1

By Tomasz Konicz [This article published on 12/25/2013 is translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/40/40631/1.html.]

For many conservative capitalism fans, the sharp criticism that Pope Francis directed at late capitalism in his apostolic exhortation Evangelii Gaudium [Joy of the Gospel, (1)] doubtlessly represents a kind of stab-in-the-back or dagger thrust. No radical criticism of the existing social order could be expected from this school that for decades was regarded as a loyal ally in the battle against godless communism, above all from conservative apologists of capitalism who preach recollection of religion and family in crisis times.

The skilful balancing act carried out by the influential radio commentator Rush Limbaugh in his criticism of the pope [2] in order not to offend the hosts of believing Catholics among his ultra-conservative followers. Before Limbaugh literally accused the pope of “Marxism,” he expressed his hope that the statements of the pope were intentionally misunderstood “by leftists” [3].

The American economics magazine Forbes even urged the Pontifex to pay the necessary respect to capitalism and show some “gratitude” [4]. The humble bow of the “Holy Father” before the principles of capital would only be appropriate because of the hallowed growth generated in the past 200 years by the capitalist world system, Forbes said. This is “nearly 60 times as much as all that the Catholic Church produced when it ran the show.” The Forbes writer projects the present social state into late antiquity to mutate the Catholic Church into an inefficient “socialist” government of the middle Ages.

Welt Online [5] was somewhat nicer in criticizing the outrage of the pope. Welt-Online actually dared to discuss an assumption that is commonly covered with a taboo: “capitalism kills.” Francis should be “a real man” but he acts almost “superhuman,” the conservative Tageszeitung jumped in. Instead a Hallelujah for the “driving force of

capitalism” would be appropriate “that catapults people out of poverty,” as clearly proven by the global development of the last years. A eulogy of the market economy from his mouth would have done the world good.”

Welt-Online is convinced the church should “appreciate capitalism.” Oh yes, we should praise the “driving force of capitalism” in view of the increasing impoverishment in Germany [6] and the 43 million Europeans who depend on food aid [7]. Creeds are presented here, not empirical facts or perception of reality. The statement “capitalism creates prosperity” represents a pseudo-religious dogma that may not be shaken even if the social disintegration tendencies increase in the centers of the capitalist world system and thousands of desperate people drown in the Mediterranean Sea who try to flee the collapsing periphery of this disintegrating world system.

Germany’s leading conservative medium, the Frankfurt Allgemeine Zeitung (FAZ) newspaper also spits out its capitalist creed in reaction to the Evangelii Gaudium. [8] Firstly, the FAZ obviously believes capitalism always existed. The apostles whom Jesus assembled are described there as “very successful small entrepreneurs” and as the “stable middle class”… At the same time the FAZ noted an “extremely distanced relation” of Christianity to private property and wealth. Christianity is marked by a “utopia of a Christian communism.” For centuries this gave believers a “bad conscience” regarding the noble capitalist values like greed and pursuit of gain that acted like a strong “prosperity brake.” Despite all historical research, the FAZ sees a cause – and not a consequence – of the crisis and the ruin of the authoritarian and extremely repressive lateRoman empire (with which the author obviously identifies) in the acceptance of Christianity. “Christians preached poverty to Europe – and the lights went out in Europe since the 5th century.” What follows from this story time is the usual capitalist confession. “This pope cannot see that the market economy and capitalism are needed to defeat poverty.”

Significantly, it is not the adherence to archaic dogmas and the continued discrimination of homosexuals within the church – as denounced by the gay catholic theologian David Berger [9] – that are now under constant mass media fire but rather the only progressive moments in apostolic letters and in the rhetoric of the pope. With his intensified capitalism-criticism, the Pontifex reacted to the massive crisis-conditioned impoverishment tendencies in Spain and Italy, Europe’s two most important catholic states. Nevertheless papal capitalism criticism is a genuine new phenomenon. Already in 1991, the anti-communist Polish pope John Paul II warned [10] of the risk of the rise of a “radical capitalist ideology” that would hand over the solution of all problems to “the blind free development of the market forces.”

What sends the editorial writers and opinion makers – the high-priests of the capital cult – into rage with the pope’s recent capitalism criticism if tried and tested anti-communists

like John Paul II often ran down capitalism? It is undoubtedly the radicalism and precision of the papal analysis that causes the broad displeasure in the middle class media. While this may seem surprising, the “Holy Father” underlined the causes and consequences of the permanent capitalism crisis – as much as possible in an apostolic letter. [11] AN “ECONOMY OF EXCLUSION” PRODUCES SUPERFLUOUS PERSONS THROW-AWAY CULTURE Firstly, the correct observation that capitalism as an economic system “kills” runs diametrically counter to the dominant worldview. The mountains of corpses produced by the market economy every year are either ignored in the dominant mass media perception as an inevitable natural phenomenon or are reduced to individual offenses of the victims.

Hunger, homelessness, malnutrition and estrangement are not inevitable blows of fate or personal failings for Francis. They are the systemic result of a perverse economic system that produces material surplus and obscene misery at the same time.

The Pontifex makes his confession to radicalism – and to the necessity of a radical social change – in the statement that “the social and economic system is unjust in its root.”

Latin experts know the term “radical” originated out of radix, the Latin word for root or origin. Therefore the pope with good reason can be called a radikalinski.

The pope sees the new character of enormous impoverishment in late capitalism. This engendered an “economy of exclusion” in which “great masses of the population are or will be excluded and marginalized without work, without prospects and without a way out.” The whole society is subjected to the “criterion of competitiveness” and “the law of the stronger” “where the more powerful destroy the weaker.” This crisis competition and the totalitarian economization [12] of society produce a growing host of human “waste” or “rubbish” who are subject to the capitalist system pressures – especially the pressure to sell one’s labor power on the labor market – without ever being able to meet these pressures.

The pope emphasizes this crisis process, this production of a “superfluous humanity” [13] by late capitalism rather exactly with the term “throw-away culture.”

“The person is seen as a consumer article that can be used and then thrown away. The “throw-away culture” is even promoted. Something new is highlighted, no longer simply the phenomena of exploitation and oppression. With exclusion, membership in the

society where one lives is attacked at the root. Through it, one stands outside and is not in the lower class, at the margin or among the powerless. The excluded are not “exploited” but waste or “refuse.”

Several public taboos of the capital cult are already broken in this radical and correct criticism. The pope says what is unspeakable. The capital relation no longer appears as a natural phenomenon whose boundless exploitation logic should serve as a normal basis for all thinking. The all-pervasive misery that is spreading in the centers of the capitalist world system loses its natural appearance. This misery is explicitly referred back to the capitalist “economy of exclusion” that is “unjust in its root” and cannot be reformed.

Naming the causes of these crisis tendencies bursts the framework of publically tolerated capitalism criticism – and seduces liberal opinion-makers like ZEIT editor Josef Joffe (“The pope wants capitalism to go to hell”) to protest [14]. The Pontifex names the “fetishism of money” as a cause that is typecast as a “dictatorship of the economy.” The “denial of the priority of the human” who decays to a “consumer article” of the capitalist exploitation machine results here.

“One of the causes of this situation lies in our relation to money since we peaceably accept its hegemony over ourselves and our societies. The financial crisis that we suffer through makes us forget that a deep anthropological crisis was part of its origin: the denial of the priority of the person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32, 1-35) has found a new merciless form in the fetishism of money and the dictatorship of an economy without a face and without a real human goal.”

Finally, the pope recognizes in capitalism an ideological competitive arrangement, a religiously established fetish system, a cultic idolatry around the fetishized and boundless exploitation movement of money as capital animated with its own life. People worship the worldly “golden calf” of capital and no longer the God of the world to come. They do not do this only on a weekday – Sunday – as in the past. The cult of capital is celebrated permanently and globally. Seven days a week and 24 hours a day, the inmates “in the dictatorship of an economy without a face” strive to make more money out of money – even if human civilization threatens to collapse with this boundless realization of this absurd end-in-itself. This accumulation of money in blind rage through ever greater quantities of expended dead labor is then sold by the mass media high priests of this fetishizing cult as the “effect of capitalism increasing welfare.”

THE POPE AS HERETIC

The journalist Christian Caryl in his Foreign-Policy-blog underlined the religious character of this dispute – in which the pope declared himself a capitalist heretic [15].

The pope urged no longer worshipping capitalism as a religion and provoked conservative journalists to endless foaming “sermons.” For capitalism apologists, the honesty of the capitalist system is an “article of faith.”

“Following the system of free entrepreneurship has become a new secular religion. They cannot bear the idea that someone with the spiritual authority of the pope dares to question them. For them, the pope has simply become a heretic.”

The pope made explicit the religious cultic character of capitalism and thus triggered this schism. The noted US magazine The Atlantic even speaks of the pope’s declaration of war on capital as the end of a “long journey from anti-communism to anti-capitalism” [16]. With his apostolic letter, the Pontifex “officially named a new enemy.”

“Progressive” and leftist groups will profit, The Atlantic speculates.

A strategic reorientation of the church under Francis is more likely than a “pull to the left.” The pope criticizes capitalism as a pseudo-religious fetish system. The fetish character of capital is obvious in its present deep systemic crisis – for the catholic religious rivalry that has never completely internalized the capital logic. In an organization existing for 2000 years like the Roman Catholic Church – that unlike the corporation listed on the stock exchange – can pursue a strategy for decades, capitalism is understood as a relatively young crisis-prone formation of society that first gained acceptance a few centuries ago, not an eternal constant of human existence.

With his distancing from the crisis-plagued capital relation and the corresponding fetishism, the pope could bring his church into position for the coming time of global upheaval and the era of emerging system transformation.

Links [1] http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papafrancesco_esortazione-ap_20131124_evangelii-gaudium_ge.html [1] http://commons.wikimedia.org/wiki/File:PP_Franziskus.JPG?uselang=de [1]

http://commons.wikimedia.org/wiki/File:St_Peter_Basilica_light_streams.jpg? uselang=de [2] http://creativecommons.org/licenses/by-sa/3.0/deed.de [2] http://www.huffingtonpost.com/2013/12/02/rush-limbaugh-popefrancis_n_4373635.html [2] http://creativecommons.org/licenses/by-sa/3.0/deed.de [3] http://www.rushlimbaugh.com/daily/2013/11/27/it_s_sad_how_wrong_pope_francis_is_ unless_it_s_a_deliberate_mistranslation_by_leftists [4] http://www.forbes.com/sites/louiswoodhill/2013/12/04/papal-bull-why-pope-francisshould-be-grateful-for-capitalism/ [5] http://www.welt.de/debatte/kommentare/article122602626/Die-Kirche-sollte-denKapitalismus-schaetzen.html [6] http://www.heise.de/tp/artikel/40/40614/ [7] http://derstandard.at/1381368186519/43-Millionen-Europaeer-haben-nicht-genug-zuessen [8] http://www.faz.net/aktuell/wirtschaft/tyrannei-des-marktes-die-kirche-verachtet-diereichen-12688735.html [9]

http://www.spiegel.de/panorama/gesellschaft/interview-mit-theologe-david-berger-zufranziskus-und-schwulen-a-913893.html [10] http://www.inhabitatiodei.com/2009/05/12/pope-john-paul-ii-on-capitalism/ [11] http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papafrancesco_esortazione-ap_20131124_evangelii-gaudium_ge.html [12] http://www.heise.de/tp/artikel/37/37354/ [13] http://www.heise.de/tp/artikel/36/36664/ [14] http://www.zeit.de/wirtschaft/2013-11/papst-kapitalismus-kritik [15] http://www.foreignpolicy.com/articles/2013/12/06/the_heretical_pope_francis_rush_limb augh#sthash.rcOERIIT.dpbs [16] http://www.theatlantic.com/international/archive/2013/11/the-vaticans-journey-from-anticommunism-to-anti-capitalism/281874/ [18] http://www.heise.de/tp/ebook/ebook_11.html

PART 2 [17] ORA ET LABORA. THE GENESIS OF THE CAPITAL CULT IS CLOSELY INTERWOVEN WITH THE HISTORY OF CHRISTIANITY

No opposition seems more crass than between capitalism and Christianity. Most capitalism apologists have emphasized this apparent gulf between capital and the Vatican in their replies to the pope’s capitalism criticism that marks his apostolic exhortation Evangelii Gaudium [1] [see Part 1: The Schism of 2013 [2].

The enormous growth dynamic of capital [3] is often contrasted to the inertia of medieval Christian societies, the Christian focus on the world to come, the self-restriction and selfsacrifice on account of God’s eternal reign oppose the capitalist orientation in this side and the selfish pursuit of happiness and wealth [4] in the here and now. Everyone could strive to realize his/her very personal heaven on earth benefiting the whole society in the long term. That is the promise capitalism gives its inmates.

Modern rationality and efficiency on which science and the economy are based are often summoned against Christian “superstition” and religious irrationality. The dynamic capitalist society seized by a permanent scientific and economic revolution appears as the concrete inheritance of the period of middle class enlightenment with which the demons and delusions of the dark middle Ages should be expelled. Nevertheless the thoroughly rationalized capitalist world is marked by escalating contradictions and increasing conflicts. The capitalist system that seems to rest on rationality, optimization and permanent innovations brings to light the delusions and demons that should have long been banished to the realms of fantasy and crazy ideas. An irrational core indwells the system despite all its rationality that reconciles the millions of death by starvation with the obscene waste of food [5] or increasing homelessness [6] with the demolition of empty living space [7] – without the absurdity of these4 conditions striking the inmates of this system.

PRAY AND SUFFER The linkage between capital and religion are closer than appears nowadays. In fact, the genesis of capital that pretends to be naked rationality is deeply interwoven with the history of “irrational” Christianity. Important impulses for establishing capital relations came from Christian reform movements. This religious-cultic theme or fetishism is still dominant today. The irrationalism of our “administered world” (Adorno) now openly coming to light is based on this religious moment that includes a process of secularization in the course of the historical acceptance of capital.

The foundation of the capitalist work society – the expenditure of labor power in the form of paid labor – can be referred back to a genuine Christian origin. The Christian monastic orders – especially the Benedictines – conferred a sacred appearance to physical work in the late middle Ages with the term Ora et labor (this cannot be found in the original Rule of St. Benedict from the 6th century). Ora et labora is commonly translated

“pray and work” but the Latin verb laborare has a broader significance. Alongside work, the verb means suffering, slaving away and being in distress.

First of all, this ambiguity of laborare intimates that the positive significance as meaning of life or theme of life attached to the labor term in capitalism did not exist in the whole earlier history of humanity. No great distinction was made between suffering and working in the Middle Ages and in antiquity. Physical work was regarded as travail and curse that the ruling classes imposed on the slaves (antiquity) or the third estate (Middle Ages). In the Bible, as everybody knows, Adam and Eve were condemned to lifelong work for the fall of man. “In the sweat of your face you shall eat bread till you return to the ground for out of it you were taken,” we read in the corresponding Bible passage [8].

Therefore the rule of the Benedictine order could also be translated “pray and suffer.”

Through the drudgery and the suffering of harsh physical labor, the monks imitated Jesus Christ’s suffering to come nearer to God’s reign. As a result, concrete physical activity was a mere means to reach an abstract goal existing outside it, the salvation of the working monk who hoped to enter paradise through prayer and work creating suffering.

Work also became a religiously interpreted end-in-itself carried out independent of concrete activity and its benefits so workers could realize an “outward” goal of the world to come.

For that reason the work of monks in its religious connotation was fundamentally different from the drudgery that slaves had to perform in antiquity or serfs in bondage in the framework of the brutal statute labor in late medieval Eastern Europe. Their coerced work was the basis for all great rebellions in the history of humanity – from the Spartacus rebellion to the rebels in the Peasants’ insurrection movement. In Europe’s monasteries, work was given its “halo;” work was ascribed with a higher meaning “making people blessed.” In the course of centuries, a change of meaning of the monastic idea of work began. The consciousness of “suffering” disappeared with the internalization of work discipline. The sacred salary gained importance.

ANTI-SEMITISM AND FINANCE CAPITAL Christianity gave work a “halo.” Christianity made concrete drudgery directed at a clear goal into a sacred end-in-itself oriented on reaching an abstract goal of the world to come.

Thus the church planted the seed of the work society in which work became a foreigndetermined end-in-itself.

Christian dogmatics also laid the foundation for the capitalist ideology that faults marginalized groups with all possible negative consequences of capitalist socialization.

This personalization of social dislocations or crisis consequences that is also very widespread in the present crisis [stateless Roma gypsies between segregation, pogrom and expulsion [9] began with the changed meaning of anti-Semitism in the ending middle Ages. In the middle Ages, Jews were forced to a few economic niches denied Christians on account of religious commands. In particular the Catholic Church’s medieval prohibition of interest led to Jews becoming active as money-lenders in the financial sphere from which finance capital later developed. Christian anti-Semitism that sees the “murderers of Christ” in the Jews decried wealthy Jews who identified with their social position and with money.

Christian anti-Semitism reached its medieval culminating point in the late middle Ages, in a phase when the social dominance of church dogmatics experienced a rapid erosion process. In the 15th century, Jews were expelled from most imperial cities – because Christians pressed in their lucrative economic niches. Thus Christians took over the economic positions of Jews as bankers or moneylenders. However the negative moral judgment of these activities in the nascent financial sphere held Jews responsible. The interest prohibition of the Catholic Church continued until first formally rescinded in the 19th century.

The ideological separation between a “good productive” industrial capital and an “evil accumulating” finance capital that recalls religious systems like Manichaeism was clearly emerging in the late Middle Ages. The labor of the Rule of St. Benedict making people blessed opposed the money-lending Jew and personified the rising financial sphere. Thus the church prohibition on interest shared as in the rise of all ideologies erroneously sees the causes of capitalist exploitation and estrangement in interest in the financial sphere and therefore in accumulating capital – and not in the rise of estranged paid labor. With its formation in the late Middle Ages, the capital cult bestowed a halo on the caused of the exploitation and estrangement in capitalism – paid labor – and delegated all negative consequences of capitalist socialization to an external group of persons (Jews) and sphere (financial circulation). The a priori division in good and evil is the basis of every cult.

THE SPIRIT OF CAPITALISM With the establishment of Protestantism, paid labor was religiously rarified in the framework of the Protestant work ethic. The accumulation of capital that spread in the early modern age is surrounded with a sacred aura by Calvinism and its doctrine of predestination. The inner worldly success of believers is regarded as a certain evidence of their election by God. Worldly riches are considered an expression of the favor of the God of the world to come who helps all those who help themselves. With the greatest possible occupational success, the believer can assure himself of his – predetermined – arrival into heaven.

Accumulation of capital can seemingly serve a religious goal of the world to come.

Through economic success, the believer will find out whether divine grace will fall to him in the scope of the predestination of the universe. Thus the accumulation of wealth did not occur with the end of enjoying their fruits or “squandering” them as carried out by the slaveholders of antiquity or the higher nobility despised by the middle class. Early Protestantism – and especially Calvinism – scorned the material enjoyment of the material fruits of lifelong rapacity to which it condemned its believers. The accumulation of capital appeared as a religiously justified end-in-itself that went along with renunciation, asceticism and hard work. This Protestant ethic of work, self-discipline and religiously motivated accumulation of wealth that changed into capital lent wings to the take-off of capitalism in early modern Europe, as the sociologist Max Weber argued in his famous treatise “Protestant Ethic and the Spirit of Capitalism” [10].

Capitalism has more than a religious origin. In the course of its historical acceptance, it literally assumed the absurd form of a secularized religion. The Calvinist may think the accumulation of capital serves the goal of proving God’s grace coming to him in Paradise. However the exact opposite is carried out in reality. The believer serves in the accumulation movement which has its own idolatrous fetishist life on the macro-social plane. The fetishism of capital, its end-in-itself dynamic of boundless multiplication, is not a false appearance. Life was breathed into the Golden Calf; it is reality, not an illusion. All economic subjects – from capitalists to paid laborers in today’s late capitalism – participate in this idolatry, not only the earlier Calvinist capitalists.

To avoid his own destruction, every economic actor strives for the highest possible profit in goods production. Otherwise shipwreck in the market competition threatens. The total movement constituted by the individual acts of market subjects and characterizing capitalist markets represents more than the sum of its parts seeking maximum profit.

That total movement counters the inmates of capitalist treadmills as a foreign quasi naturally-growing power, as a subject seemingly animated with its own life, striving for the greatest possible self-exploitation and demanding ever new sacrifice in the form of ever greater “practical constraints.” According to Marx, this process takes place unconsciously “behind the backs of the producers.” Marx summed up this absurd state of a seemingly “enlightened” society standing under the spell of a self-produced uncontrollable capital dynamic with the term automatic subject. [11] The automation of perpetually expanding capital exploitation assumes the form of a subject that gains an overwhelming divine fullness of power over against members of society.

Therefore the capitalist society seized by an uncontrollable capital dynamic represents an end-in-itself and by no means helps attain the widely propagated “prosperity.” Similar to Protestants and Benedictines, we are forced to endure in the greatest possible asceticism and readiness to sacrifice despite all our material wealth, to tighten our belts more and more, to mobilize the last work reserves and push self-optimization to the extreme. This

is the case with “management” who has no time to spend and enjoy the accumulated riches. On the other hand, divine anger threatens us sinners. “The markets devastate whole national economies and regions as soon as their inhabitants can no longer serve as bearers of the nascent exploitation movement. Thus capitalism represents a sacrificial cult to which in its crisis ever more human sacrifice must be brought as in pre-Christian times. Money must bring more money. Human sacrifice is offered for the maintenance and permanent expansion of the fetishist dynamic ravaging the whole planet even though society suffocates in material surplus.

OUR FETISH THAT ART ON EARTH Money has its own movement in capitalism and exercises “its hegemony over us and over our societies,” we read in the pope’s capitalism criticism. All changes in form that capital assumes in its boundless exploitation movement – that is money, commodity and labor – are moments of capitalist fetishism. Capitalist paid labor is also estranged to paid laborers. It also serves the world to come of the foreign end-in-itself of capital and the instrumentalization of the workers. The work products and goods – seized by the exploitation movement – also seem to live a life of their own as soon as they are introduced to the market sphere by the rival producers. The irrational accumulation of profit, of dead overexerted labor, is at the center of this idolatry around the fetishist automatic subject who is warded off with the application of the highest instrumental rationality.

The capital-idol appearing on this side forces humanity to a sacrificial cult in which believers must maintain its blind usurious growth under ever new privations through all changes in form of the transformation process. Consequently capitalism is also a fetishist social formation in which members of society are subjected to social forces produced – unconsciously – by them but eluding their direct control. Thus capitalism can be equated with other religiously marked fetishist societies. In the middle Ages, religious dogmas developed a life of their own and influenced the structuring of society. Religion could become a very concrete and deadly force in the form of the holy inquisition…

Links [1] http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papafrancesco_esortazione-ap_20131124_evangelii-gaudium_ge.html [1]

http://commons.wikimedia.org/wiki/File:Benedikt_von_Nursia_20020817.jpg? uselang=de [2] http://www.heise.de/tp/artikel/40/40631/ [2] http://creativecommons.org/licenses/by-sa/3.0/deed.de [3] http://www.forbes.com/sites/louiswoodhill/2013/12/04/papal-bull-why-pope-francisshould-be-grateful-for-capitalism/ [4] http://www.faz.net/aktuell/wirtschaft/tyrannei-des-marktes-die-kirche-verachtet-diereichen-12688735.html [5] http://www.dw.de/verschwendung-von-lebensmitteln-in-der-eu/a-16429094 [6] http://www.welt.de/politik/ausland/article120466715/So-macht-die-Wirtschaftskriseobdachlos.html [7] http://www.handelsblatt.com/finanzen/immobilien/nachrichten/immobilienmarktspanien-mit-der-abrissbirne-gegen-die-krise/8597256.html [8] http://bibel-online.net/buch/luther_1912/1_mose/3/ [9] http://www.heise.de/tp/artikel/39/39556/ [10]

http://de.wikipedia.org/wiki/Die_protestantische_Ethik_und_der_Geist_des_Kapitalismu s [11] http://de.wikipedia.org/wiki/Automatisches_Subjekt [13] http://www.heise.de/tp/ebook/ebook_11.html

THE PROPHECY

By Tomasz Konicz Walter Benjamin’s 1921 fragment “Capitalism as Religion” describes the present crisis.

Capitalism, as secularized religion – Part 3 [This article published on 12/27/2013 is translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/40/40650/1.html.]

The description of the capital relation is not new. The “theology of liberation” anchored in South America criticizes “the market as an idol and neoliberal capitalism as a doctrine of salvation and sacrificial cult,” as the theologian Heribert Bottcher formulated [1]. In reaction to the neoliberal revolution in the 1980s, liberation theology continued the biblical distinction between the Christian “God of liberation” and the “idol of death” which is identified with the capital relation literally striving for total rule.

PART 2: ORA ET LABORA [2] In reaction to the deep crisis of the capitalist system in the 1970s [The End of the “Golden Age of Capitalism and the Rise of Neoliberalism (3)], neoliberalism turned into an offensive in which the system principles were literally pushed to the extreme.

Everything became a commodity. All social areas became subject to the laws of the capitalist market. All people have to spend their lives in continuous capitalist selfoptimization. The capital fetish does not tolerate any alternative forms of reproduction or non-capitalist niches beside itself.

This market-mediated totality of the capital relation that was driven to the extreme in reaction to its ever stronger crisis has allowed this to become an “all-determining reality.”

This term functions “as a generic term for the divine… in pluralist theory,” as Bottcher explains following a thesis of the theologian Thomas Ruster.

“Capitalism and no longer Christianity represents the religious experience of an “alldetermining reality” and thus becomes the religion of society. Ruster understands capitalism as exchange of goods mediated by money. Its end-in-itself is the multiplication of money. Money replaces God and becomes the “all-determining reality.”

Thus the capital-cult pushed to the extreme in reaction to its deep system-crisis [4] is first recognizable in its all-devouring totality as a religious system and “all-determining reality.” In its crisis, the irrational idolatrous character of the automatic subject [see Part 2: Ora et labora (5)] dominating people – and by people – first comes to light.

CAPITALISM AS RELIGION The religious character of the capital-cult was recognized very early by the philosopher and literary critic Walter Benjamin. His 1921 fragment “Capitalism as Religion” [6] reads like a prophecy of the current crisis dislocations. The author regarded his time as premature for the general acceptance of this discovery.

Capitalism can be seen as a religion. Capitalism essentially serves as the satisfaction of the same worries, torments and disturbances to which the so-called religions gave answers. The proof of this religious structure of capitalism is its essential religious appearance. We cannot pull tight the net in which we stand. This will be explored later.

As a result a concrete historical dynamic is specific to the capitalist system. This system does not represent a “natural” supra-historical constant of human existence as propagated continually by the eternity-claim of the capital cult. Capitalism is a fetishist social formation that had its beginning in the historical constitution phase in the early modern age, reached its peak in the high capitalism of the late 19th and 20th century and entered the historical period of the descent of late capitalism around 40 years ago. The nature of capital as an “essential religious phenomenon” was first revealed with its full historical development – namely with the total unfolding of the inner contradictions of capital relations as soon as it struck the total limit of its reproduction capacity.

The net of intensifying system pressures and escalating contradictions tightens for the inmates of the capitalist treadmill. The mesh becomes visible and the cultic character of boundless capital accumulation by the automatic subject becomes evident in the globally escalating dislocations and breakdown tendencies. The absurdity of increasing accumulation of abstract riches in which more and more people are excluded is manifest in view of its disastrous social and ecological consequences.

Therefore the current crisis proves that capitalism is a cultic affair. Benjamin names three characteristics specific to this religious structure of capitalism.

Firstly, capitalism is a pure cult religion, perhaps the most extreme that has ever existed.

Everything in it only has meaning with reference to the cult and has no special dogmatic or theology. Utilitarianism gains its religious coloring under this point of view. A second feature of capitalism is joined with this concretion of the cult. Capitalism is the celebration of a cult sans reve et sans merci. There is no “weekday” there, no day that cannot be a holiday in the dreadful sense of the unfolding of all sacred pomp and the most extreme exertion of the worshippers.

The capital-cult marked by utilitarianism and blind usefulness thinking that must be practiced uninterruptedly is based on a foundation regarded as sacrosanct in late capitalist ideology: paid labor. The religious appearance that protestant ethics and the monastic orders of the middle Ages bestowed on work descends from the world to come into this side.

The performance of paid labor is the cultic act all paid employees have to perform every day. Concrete labor in capitalism serves an abstract “foreign” goal that is entirely thissided and need not be projected into a world-to-come as with the Benedictines or Calvinists. Labor has a double character and is only performed in capitalism when it helps increase profit and create useful goods.

Since paid labor is the substance of capital, the capital dynamic ultimately has its end-initself in the accumulation of ever larger quantities of expended labor, the capitalist labor process is the real foundation of the capital-cult. The creation of useful goods only serves the automatic subject by realizing objective profits in them. The concrete (the useful good, the concrete work activity) is only important as bearer of the abstract (profit and abstract-general labor). Concrete work is only socially valid with simultaneous realization of profit.

Therefore destroying masses of “unsaleable” dwellings or food – that cannot realize profit – can be very “sensible” in capitalism while people are starving or freezing to

death. The cultic essence of paid labor as a source of the exploitation movement of the automatic subject produces goods that should break right after the expiration of the guarantee or become outdated as quickly as possible to create the basis for a new exploitation cycle.

This means the term automatic subject has a double meaning. On one side, its own movement and uncontrollable social dynamic of the market-mediated exploitation movement – that they produce themselves - faces market subjects as a foreign “divine” power. At the same time the term implies that subjectivity in capitalism is only possible within the automatism of the exploitation movement.

“Economic subjects” can actually only assert their subjectivity in the decision how the boundless accumulation of capital can be accelerated and optimized. The persons trimmed into powerless objects of the administered world (Adorno) can only dream the perverted dream of a high-handed subject behind the cultic character masks (Marx) of their economic function – by permanently optimizing the automatism of the exploitation movement under their own direction.

The desolation of this cult is obvious. All human activity and all production of this society only promote the usurious growth of the automatic subject – by confirming persons as automatic subjects.

The utilitarianism mentioned by Benjamin, a hollow rationalist usefulness thinking that abandons the irrational goal of the exploitation of paid labor, is actually the supportive movement of the capital-cult. The dynamic of the automatic subject is accelerated by a stubborn instrumental rationality that leads to a constant revolutionizing of the productive forces. However the contradictions inherent in the capitalist mode of production will also intensify. The capital-cult whose only cultic act consists in the endless expenditure of paid labor strives to banish paid labor from the social reproduction process through rationalization. Capital successively loses its own substance – labor – so capitalism can only be maintained [7] by globally contracting debts as a total world system.

GUILT AND DEBTS The increasing breakdown of persons in this escalating contradiction of the capitalist mode of production – that produces a superfluous humanity – creates growing mountains of debt and an “enormous debt consciousness” that rises into a cult in order “not to atone for this guilt but to make it universal. Capitalism does not represent a liberating religion, Benjamin explains. It does not offer any redemption from guilt and the literal debts but produces their universalization.

“This cult is owed to a third party. Capitalism may be the first case of an indebted cult, not an atoning cult. In this religious system, a gigantic guilt consciousness that does not know how to atone seizes the cult in order to make this guilt universal, not to atone for this guilt, to drum it into consciousness and finally include God in this guilt to ultimately interest God in atonement. This cannot be expected in the cult or in the reformation of this religion…

Holding out to the end, to God’s ultimate complete indebtedness, the attained world state of despair for which people still hope, lies in the nature of this religious movement which is capitalism. The historically-unheard-of characteristic of capitalism is that this religion is the demolishing of being, not the reform of being. Despair is expanded to a religious world state from which healing is expected.

Capitalism according to Benjamin is a religion of death that carries out a “demolishing” of social existence to expect a “healing” from the expansion of despair into a religious world state. The indebtedness arising from the cult – charged to the “malicious” Jewishconnotated financial sphere – is countered with the production of guilt consciousness.

This guilt consciousness is the foundation on which sacrifice can be demanded.

Thus capitalism ultimately turns out to be the most bloodthirsty sacrificial cult of humanity’s history before which the sacrificial rituals of the Aztecs or Incas pale into insignificance. Whole regions and economies in the present crisis are driven into socioeconomic collapse and massive impoverishment to pay for the debt arising out of the increasing self-contradiction of the capital-cult. Millions were driven into poverty; hundreds of thousands have lost their housing and thousands their lives to do penance for the “offenses” of the past without which the cult cannot be maintained. Greece and Spain now pay the capital for their sins. The guilt consciousness whose genesis Christianity set in the world to come with the fall of man also experiences a process of secularization here.

The German austerity sadism spreading all over Europe is the perfect example for capitalism as an “indebted cult.” By “holding out to the end,” by austerity measures and “pushing to the extreme” of the cultic acts of an increasingly more efficiently and brutally organized work regime, people hope to overcome the crisis and bring about a “healing.”

Instead the huge mountains of debt of crisis states rise higher and higher while the system-immanent contradictions escalate. The more efficiently and rigorously paid labor is organized in the present crisis, the more intensely rationalization tendencies spread in goods production intensifying the crisis of the capitalist work society – and make further debt-making indispensable for maintaining the exploitation movement of the automatic subject.

Paid laborers literally work for their crisis. The more harshly and ruthlessly this cultic act of paid labor is carried out, the more intensely the noose of systemic contradictions tightens around the necks of the capital-believers. The “world state of despair” is reached. “God himself is drawn into this guilt” with the massive devaluation-push that ultimately must seize money.

The capital-god can now be recognized as such. Another characteristic of the capital-cult according to Benjamin is that its “god” must be hidden and may first be addressed at the zenith of its indebtedness… Every conception and every idea of this god violates the maturity of the mystery.

GOD IS NOT DEAD. GOD WALKS AMONG US. Nothing is more inverted than the often postulated “death of God,” Benjamin said. God’s transcendence has fallen. But God is not dead; God has entered into human fate.” The historical acceptance of the secularized religion of capitalism involved God’s change from transcendence to immanence. The end-in-itself movement of capital now acts as a revengeful, moody and capricious god who seems to originate from ancient sagas of preChristian time or the Old Testament.

This automatic subject dominating people can devastate whole continents if the capitalcult is not practiced with the necessary efficiency. The social collapses triggered by the Old Testament rage of the “markets” in the stricken countries assume the dimension of biblical plagues. In the crisis, the world of gods and sagas of antiquity seems awakened to life.

As a result, paid laborers powerlessly face these idols perishing in their inner contradictions. The basic contradiction of the capital relation, according to crisistheoretician Robert Kurz, consists “on one side in making the expenditure of human energy an end-in-itself and on the other side in making labor unnecessary in the production process of capital by means of science through mediation of anonymous competition on the growing ladder.” [8] The cultic act – the “expenditure of human energy as an end-in-itself” first awakens the capital idols to life. The cult action of this secularized capital-religion is capable of something that all followers of religion have long dreamt for thousands of years: the awakening of their gods to life carried out by cultic acts. However the work regime

perfected in a utilitarian way again and again brings about the death of this god walking among us and devastating the world.

This overwhelming foreign power that wildly thrashes about in its agony seems divinelyinvincible. However at the same time it represents a fetishist form of rule and is – unconsciously – produced by people everyday. The social rule in capitalism consists in the rule of people by abstract social structures constructed by humans, not in the rule of persons over persons. We make our gods – and consequently can overthrow them.

Fußnoten 1) Robert Kurz, Marx lesen, Die wichtigsten Texte von Karl Marx für das 21.Jahrhundert, Frankfurt am Main 2000, S. 139.

Links [1] http://www.oekumenisches-netz.de/11-07-boettcher.pdf [2] http://www.heise.de/tp/artikel/40/40648/ [3] http://www.heise.de/tp/artikel/29/29184/ [4] http://www.heise.de/tp/artikel/36/36123/ [5] http://www.heise.de/tp/artikel/40/40648/ [6] http://www.streifzuege.org/2013/kapitalismus-als-religion [7]

http://www.heise.de/tp/artikel/36/36123/ [8] http://www.heise.de/tp/ebook/ebook_11.html

ALTERNATIVES TO STAGNATION AND DEPRESSION

By Joachim Bischoff [This article published on 7/22/2013 is translated abridged from the German on the Internet, http:////http://www.sozialismus.de.]

The 20 leading industrial- and threshold countries (G20) conjure economic growth in view of growing uncertainties in the world economy. At the G20 summit in September 2013 in St. Petersburg, there should be an action plan with a short-term emphasis on more growth and employment, the G20 financial ministers and central bankers declared.

The German economy is in an upwind, according to the German Bundesbank president Jens Weidmann. . Germany will post “an enormous profit in the spring” after a weak winter. This outlook for a slight strengthening of the German economy should certainly be taken with a grain of salt. In 2013 growth in Germany will move in a corridor from 0 to 1 percent. The prospects for the Eurozone are even more modest. Germany remains the locomotive for the European economy. In 2013 the Eurozone will continue in recession and shrivel 0.6%. In 2014 it should rise 0.7 – thanks to Germany. Without Germany, the economy of the Eurozone would only grow 0.2%. “This is neither a recovery nor a recession,” reported Kai Carstensen from Ifo in Munich. Considered realistically, one could also say politically-conditioned smooth-talking is at work here.

The recession in the European monetary union is deeper and will last longer than predicted by many economists and most political decision-makers. There are undeniably signs pointing to a gradual improvement of the economic situation. At the earliest the economy of the Eurozone will not shrivel any more in the third quarter. For the whole year most economic experts assume a 0.7% decline of the economy in the Eurozone. This will be the second recession year in a row. Economic weakness is a problem of southern Europe’s debt states first of all.

In Greece, Portugal, Cyprus and Ireland, the downward dynamic is unbroken thanks to the ridiculous austerity policy. However the weakening of domestic demand has expanded to the core of Europe, namely to France and the Netherlands. In countries like Italy, the political contradictions increased in the last months. Hardly anything of a necessary growth policy can be seen in France, Italy or the Netherlands. The European Central Bank holds fast to its policy unlike the US where brightened economic data moves the Federal Reserve to suggest throttling down the expansive monetary policy.

Commercial banks that deposit their surplus liquidity over night with the European Central Bank do not receive any interests today. With this measure, the financial institutes should be moved to award more credits to corporations. However commercial banks withholding credits from businesses is not only a problem in the periphery-states of the Eurozone. A withholding of investments for reasons of cost reduction occurs on the side of businesses. Infrastructure investments of the public authority declined in the last years. The Netherlands, model student of austerity ideologues Merkel/Schauble for years, is caught by the downward dynamic. With a 0.8% decline of economic output, the country will come out the weakest this year within core Europe.

The restraint of corporations in wages and investments is to blame here – as in the Euro periphery states. This led to a decline of domestic demand. This trend is intensified by a rise in the unemployment rate, higher income taxes, falling home prices and increased indebtedness of private households. The conclusion is that the austerity policy pushed by Germany in the Eurozone intensifies the crisis constellation and remains focused short of breath on merely gaining time. More crisis measures will be adopted after the September 2013 Bundestag elections. The Austrian economic researcher Stephan Schulmeister massively criticizes the austerity policy in the Eurozone and the one-sided interpretation of development. “We are skidding into a depression” (“Ten Steps into Depression” in Frankfurter Rundschau 7/18/2013).

It is “incomprehensible” that the majority of German economists repeat what was done under the Heinrich Bruening government in the inter-war period. All chances of reviving the economy in Germany were stifled at that time through the severe austerity course. A “catastrophic development” is manifest in southern European countries. No upswing is possible in these states through the austerity policy. Gradually the shriveling process also seizes the northern countries. The financial crisis of 2008, the following Euro-crisis and its perception as a state debt crisis are part of a long-term process of worsening economic and social outcomes under financial capitalist framing conditions. “Politics has fought the symptoms of the great crisis with banking- and economic packages while its systemic causes remain untouched… The hardest phase of the great crisis is ahead of us, not behind us. All sectors try to safeguard their position through spending cuts amid falling stock prices, high unemployment, empty state treasuries, EU-wide austerity policy and unstable exchange rates and raw material prices: businesspersons, households, foreign countries and the state. That is fuel for a crisis over several years.”

Breaking out of the downward dynamic and an age of austerity requires a political change to a “New Deal” as a concrete alternative concept. To promote the transition to real capitalist framing conditions, the “New Deal” gives greater priority to activities in the real economy than the activities of “financial chemistry.” Simultaneously the overall strategy concentrates on those tasks that were systematically ignored in the neoliberal age. Their mastery would enormously increase real value creation and permanently improve conditions for a “good life,” according to Schulmeister. In the middle of a grave crisis, an efficient macro-economic fiscal policy must redistribute income from the household sector to the state so private savings decline but not consumption.

At the same time short-term speculative activities should be limited to the financial markets and long-term real economic activities of businesses promoted.

The measures of the “New Deal” can be financed by contributions of high and the highest incomes and assets and by a higher taxation on financial transactions and financial assets. The core problem of breaking out of a stubborn depression in the EU is inadequate social demand. Businesses do not invest enough in new plants or equipment and therefore create little wage income and jobs. The alternative to consolidation policy can be viewed as a political decision, setting investments over social consumption and getting the economy going again. This has absolutely nothing to do with a continuation of debt policy.

Interventions in distribution conditions are necessary, selective tax increases in times of economic distress. Europe needs structural reforms but not as urged by defenders of a consolidation policy. The alternative to consolidation includes financing public goods and services not adequately funded by the private capitalist sector through increased taxes on higher incomes and on profits on property and amassed mammoth assets: improved social security, education, health care and public infrastructure. Thus the alternatives for further development are clearly outlined. One cannot assume they will play a great role in Germany with the present hierarchy of power.

CRITICISM OF ECONOMICS

By PROKLA editors [This editorial published in June 2013 is translated from the German on the Internet.]

The financial crisis of 2008/2009 and the following economic crisis have shattered dominant economic theory and the economy. Extensive deregulated financial markets, the peak of economic efficiency according to neoclassical doctrine plunged into a deep crisis in the shortest time. A far-reaching collapse of the international financial system could only be prevented through enormous state bonds and financial injections for big banks – in complete contradiction to the market radical dogmas. The analytical helplessness of neoclassicism was so obvious in view of the crisis that many appearances of its advocates seemed embarrassing. In light of the vast economic programs with which the US, Germany and other states reacted to the financial market- and economic crisis, some observers saw a Renaissance of Keynesianism on the horizon. In some media, people are even reminded of the Marxist theory that crises are necessarily part of capitalism.

But all this has not damaged neoclassicism very much. Its reputation is somewhat tarnished. That the market creates the best of all possible worlds and that privatization of state enterprises automatically leads to more efficiency and greater prosperity cannot be defended in the public as easily as a few years ago.

Heterodox, Keynesian and Marx-oriented voices have become louder. However the dominance of neoclassicism is institutionally unbroken in universities, research institutions and think tanks – both on the “supply” and on the “demand side.”

For years business administration has been in first place in the popularity of students at German universities. More young persons than ever prefer it to jurisprudence or medicine. It ranks far ahead of German studies, language and literature for young women.

Managers and financial- and business advisors mostly decide for business administration because business administration promises prestigious vocations and relatively high incomes. The discipline is often denied an academic or scholarly character within the scientific community since neither theoretically nor empirically higher claims are pursued… “Customer-orientation,” “Entrepreneurship,” “corporate branding” and “guerilla-marketing” are often put on the market as panaceas or magic formulas without facing the limits and internal contradictions of those concepts.

The MBA course (Master of Business Administration), the royal discipline of manager education, is internally criticized by some because complex realities are reduced to numbers enabling quick decisions without understanding the economic and social context. They are accepted uncritically by most students and teachers. The popularity of

the discipline is a symptom of a social condition that is not limited to the organization of the economy but should be applied to culture, education and the social state… Moving the actors into the center and propagating markets as the most efficient form for allocating resources are characteristics of the economics discipline. The continued dominance of neoclassicism in the last decades was also connected with a reprioritization of economic themes.

Micro-economy has strongly gained terrain over against the macro-economy that in its Keynesian variants always stood in suspicion of abandoning the way of pure faith in the market. The micro-economy has proven to be very capable of learning by largely bidding farewell to the ideal type of homo oeconomicus, this calculating machine on two legs incessantly estimating benefits or profits. That people have limited information, depend on others in their behavior and have cultural characteristics was a common inheritance in sociology since time immemorial. However new discoveries on the conduct of actors on the financial markets are offered in behavioral economics and in specializations like behavioral finance. The insight that these actions in no way act in an instrumental rational way but are “risk adverse” under circumstances, apply a “cognitive framing” for information and often display a “herd conduct” undoubtedly represents a reality-gain.

However those explanations that reduce connections of society to “irrational” psychic dispositions of its members prove half-hearted since they fade out the structural moments of capitalist economics – the pressure exerted on many of these actors to maximize shortterm profits on deregulated markets under the whip of competition. These actors undoubtedly act under uncertainty but can assume – as far as they have a certain power position like banks – that they will successfully shift the risks of incorrect calculations to weaker market actors or the state. Different possibilities of actors and social power relations should be analyzed, not only systemic pressures of orientation in profit. These dimensions are diligently faded out when a textbook world is assumed… Reproaching dominant economics as unrealistic or out of touch is hardly new. In the 1960s Hans Albert criticized a discipline that delighted in constructing elegant models where all actors acted rationally and the economy represented a system of adjustments and recurring states of balance that can be disturbed from the outside. He described this denial of reality as “model Platonism.” Such arguments were countered with the idea – we are at the beginning of a long promising research way – an idea repeated rightfully four decades and several crises later.

A criticism referring substantively to neoclassicism is stronger than the merely formal criticism of model Platonism. These are on principle two very different starting points.

On one side a criticism of basic neoclassical categories can be oriented in the Marxist criticism of political economy that shows neoclassicism cannot fulfill its own claims. The usual abstractions out of touch with reality are not enough. One must go further and presuppose a “one-commodity-economy” (an economy in which only a single kind of capital goods is produced). With a “two-commodity-economy,” popular doctrines prove wrong like the wage rate and the extent of employment which are in an inverse relation.

The employment level can only be raised when wages (or non-wage costs) fall…

The opposition of orthodox and heterodox recalls historical struggles of the Catholic Church against deviationists and heretics. Even if the stake is not common nowadays for excluding dissenters, the methods of the orthodox mainstream prove extremely effective in preventing pluralism and open debates by simply ignoring the heterodox, particularly by not citing them in scholarly journals or appointing them to professorships. An intensified effect of “methodical monism” appears in the popular journal Rankings in the framework of the dominant paradigm.

Katharina Mader and Jana Schuldheiss emphasize that feminist economy has enormous variations and is not a closed system… The dominance of neoclassicism is important for the real economic praxis of the state and businesses and not only for academic life… The triumphant procession of “quantitative risk measuring models” was promoted by the discipline, given Nobel Prizes and anchored institutionally by authorities.

TEN THESES ON THE CRISIS

by Ingo Schulze It is the madness that has become self-evident: for years, the public sphere has been plundered and democracy ruined. The German writer Ingo Schulze has had enough. Here he sets out ten reasons to take himself seriously again.

For about three years I haven’t written any articles, because I no longer know what I should be writing about. It’s all so obvious: the elimination of democracy, the increasing social and economic polarisation between rich and poor, the ruin of the welfare state,

privatisation and commercialisation of all spheres of life and so on, and so on, and so on…

If the madness is served up to one every day as a matter of routine, it’s just a matter of time until one considers oneself to be sick, abnormal. In the following I will try to summarise some thoughts that seem important to me: 1. To speak of an ‘attack’ on democracy is to speak euphemistically. A situation in which a minority of a minority is allowed – i.e., it is legal – to seriously harm the public good for their own enrichment is post-democratic. The public sphere itself is guilty, because it is unable to elect representatives that perceive its interests.

2. Every day one hears that governments must “win back the confidence of the markets.”

By ‘markets’ it is primarily the stock exchanges and financial markets that are meant: that is, those speculators who, in pursuit of their own interests or the interests of others, are raking in as much profit as they can. Are they not those who have relieved the public sphere of unimaginable billions? They are the ones whose “confidence” our top elected officials should be struggling to win back?

3. We are right to be outraged by Vladimir Putin’s concept of “guided democracy”. But when Angela Merkel spoke of “market-based democracy”, why did she not have to beat a retreat?

4. The collapse of the Soviet bloc helped some ideologies turn into a hegemony so unchallenged that it has come to be accepted as a natural state. One example of that would be privatisation, which was seen as something boundlessly positive. All that remained in the possession of the public sphere was deemed ineffective and consumerunfriendly. Thus there spread throughout society an atmosphere that, sooner or later, had to force that public sphere to relinquish its own power.

5. Another ideology that enjoyed a great blossoming is the ideology of growth: “Growth isn’t everything – but without growth, nothing amounts to anything,” as the Chancellor decreed some years ago (2004). The euro crisis cannot be discussed without reference to these two ideologies.

6. The language of the politicians who should be representing us can no longer grasp the reality (something I already lived through in the GDR). Their language is one of selfassurance that no longer receives any checks and balances from across the negotiating table. Politics has degenerated into a mere vehicle, a bellows for rekindling the fires of growth. The Citizen has been cut down to the status of Consumer. Growth in itself means nothing. Society’s ideal would be the playboy who consumes as much as possible as fast as possible. And what would cause a tremendous spurt in growth? A war.

7. The simple questions: “Who benefits from it?” and “Who makes money off it?” have become crude, gross, unrefined. “Are we not all in the same boat?” Anyone who doubts this must be “stuck in class struggle”. The social and economic polarisation of society has

taken place accompanied by loud incantations to the effect that we all share the same interests. A walk through Berlin is enough to illustrate the error of that contention. In the better neighbourhoods the few unrenovated houses are by and large schools, kindergartens, retirement homes, swimming pools and hospitals. In the so-called problem areas the unrenovated public buildings are less conspicuous, and poverty can be glimpsed in the gaps between the teeth of passers-by. Today, as the demagoguery would have it: “Sure, we have all lived beyond our means, but everyone has been greedy.”

8. In being deprived of its income, our public sphere has been and is being systematically driven up against the wall by our democratically elected representatives. Under the Schroeder government the top tax rate in Germany dropped from 53 to 42 percent, while corporate tax rates between 1997 and 2009 almost halved, namely to 29.4 percent.

Nobody should be surprised that the coffers are empty, even though our gross domestic product has grown year after year.

9. A tale: what was once peddled to us as an antagonism between East and West Germany is now being peddled as an antagonism between countries. In March I held a reading in Portugal, in the city of Porto, from one of my books in translation. The atmosphere of friendly interest was from one moment to the next chilled by a single question from the audience. All of a sudden, we were merely Germans and Portuguese, who sat facing each other as enemies. The question was unpleasant. Were we – meaning myself, a German – now taking over with the euro what we had failed to take over with our tanks? Nobody in the audience disagreed with the sentiment. And suddenly I responded as desired – namely, as a German: “No one is forced to buy a Mercedes,” I said, offended, “and they should be happy to be getting credit that would be cheaper than credit on the financial markets.” I thought back to all the German newspaper stories heaping abuse on the PIGS countries, and it made my molars grind.

In the uproar that followed, my head cleared. And since I had the microphone in hand, I stammered in my imperfect English that I would have responded just as stupidly as they had, that we would all be falling into the same trap, if we, as Portuguese and Germans, sided reflexively with our own national colours as we would at a football game. As if it were now about Germans versus Portuguese, and not the upper versus the lower classes – that is, those who in Portugal as in Germany brought this situation about, and who profited and continue to profit from it more than they deserve to.

10. It would be democracy if the politicians intervened in the existing economic structure through taxes, laws and controls, and forced the players in the markets to play by rules that were compatible with the interests of the public sphere. It’s about the simple questions: Who benefits from it? Who profits from it? Is this good for our public sphere?

Ultimately, it would be the question: what kind of society do we want? That would be democracy for me.

At this point I must break off. I would still like to talk about a professor who said that he had reverted to seeing the world the way he had as a fifteen-year-old, about a study from ETH Zurich that looked into the interdependence of corporations and came up with a

tally of 147 of them that have divided up the world among them, the fifty most powerful being banks and insurance companies. I would like to talk about what an important thing it is to take oneself seriously again and to find other like-minded people, because one cannot speak a different language on one’s own. And about getting back into the mood to open my mouth again.

Translated from the German by Anton Baer

HOW DOES JUSTICE COME TO THE ECONOMY?

By Johannes Mosmann [This address from 11/30/2010 at the GLS bank Christmas meeting of the “Fair and Regional Charter” is translated abridged from the German on the Internet, www.fairregional.de,] Ladies and Gentlemen, I was invited to speak about the question what justice in economic life can mean, what the word “fair” implies when we speak of “fair trade” or the “Fair and Regional” initiative. This is obviously a vast theme that I can only outline

in the half hour allotted. What is fair in fair trade? Different answers are possible here.

The end-consumer in the West must pay the producer in the third world more, One could think of the little community where agriculture is carried out through contributions of coop members. One could focus more on what happens in the value-creation chain before the product reaches the customer, that is what happens between producer, processor and trader. Many ways are now tested to bring more justice and fairness into our cooperative life.

Everything bad and cruel that our age inflicts doesn’t need to be denied to proclaim on the other side that our age also brings a hope that is not yet. This hope is something new.

Obviously there have been many idealists with sublime ideas before us. Comprehensive drafts of society were dreamt up by individual minds and then introduced somehow.

Individual heads believed they had the perfect idea for the life together of all people and tried to promote this idea in reality. An idea simply extrapolated from a head into reality is a foreign body for this reality, something stiff, rigid and inflexible that cannot be digested by the living process of social life. Thus an idea becomes a tyranny for life. For that reason the great social utopias from socialism to neoliberalism must become tyrannies for people.

Something else is involved with the movement for solidarity economics. There people are clear that they have an inner life, an intellectual or spiritual life and that this intellectual or spiritual life is very different from the outward reality of the present social process.

The self with its ideals is on one side and the social life in its present form is on the other side. The two do not agree. In this movement for solidarity economics, people become active who do not react to the contradiction between their ideals and outward conditions in urging a super-idea as a law from some world summit forcing all persons to become ideal persons.

Far-sighted persons set out in the movement for solidarity economics. These people feel they are part of this outward life and do not only live in their inner life. I have to move in this outer world. Moreover I violate my ideals… When I buy something, I pay a valueadded tax and the taxes are then spend for the war in Afghanistan or for bailing out speculators. Since one cannot be other than in this world and moving in it, one must answer the question very differently about doing justice to the ideal in oneself… With every social initiative, with every social organization and every institution of social life, one must work against the force of gravity of one’s institution and endure this tension.

Therefore returning again and again, going inward again and again and visualizing the ideal from which one starts is essential for a social project. One has to go beyond and submerge.

One must return to oneself and make clear one’s goal. So I understand my task, to give a little impulse so you can desist in the next hour from concrete everyday work and envision the ideal of justice. What does justice in economic life mean? What is fair trade?

I must admit something is wrong about the question. A very funny feeling creeps over me…

The fact that there is something like Fair Trade reveals the whole decadence of our way of life. Fair Trade casts a light on the state of this economic life by the absurdity that economic life should be made fair… Even if Fair Trade may not be a future-friendly model for the economy, it makes clear what must change in the future. Regarding fundamental principles of the economy, the economy is based on people exchanging services with one another. This service exchange is absolute in the modern division of labor economy since every person completely depends on other persons producing completely depends on other persons producing vital things and can hardly survive from his or her own work. If the economy has its own principle, it is altruism not egoism. I turn the question upside down. I don’t ask first how justice comes into the economy. I ask: how does injustice come into the economy? How is egoism possible? I have pursued this question in the last years.

The causes of injustice lie in the legal life and cultural life, not only in the economic life.

How is it possible that the farmer in Ethiopia is given 1 euro as a daily salary for coffee while he must buy the kilo of millet seed to feed his family for 1.30 euro and thus live like an animal so we can sit around in our luxury furniture and sip coffee. On a legal plane, an inequality arises that one has state authority on one’s die and the other is opposed by state authority. The hierarchy oi power is involved. Inequality before the law is ensured through the ownership law imported from Roman patriarchy and transferred to Africa… Ethiopia needs aids supplies and knowledge technology from the West.

Flowers, grains, coffee and so forth are now cultivated everywhere in Ethiopia for Germans, Saudis and Israelis. Ethiopians are held as slaves. One can only answer the question about the cause of injustice when all 3 areas of human life are considered…

The conditions for a fair trade have to be sought in the legal and cultural areas, not only in the economic sphere. For example, these conditions depend on the land being used for grain and not taken away… Like development in the legal realm, fairness in the economy depends on development in the cultural sphere. “Fair and regional” is ultimately based on people appropriating a certain view of the person beginning to be interested in other people and beginning to be interested in the relation of humans and nature. Thus fair trade is dependent on the cultural area and on the education question. People must be educated so they have an interest in each other. They can develop an understanding for the special needs, abilities and inclinations of others to make justice possible in the economic area.

The hurdles we have to surmount in education are in no way less than the hurdles in economics or in the legal realm. Since education is not free or unliberated, education is ruled by the powers that carry ou9t injustice. People cannot freely research or be freely educated because education is dependent on state- and economic power… We may not indulge in illusions any more: the educational system is largely in the hand of markets that are hardly interested in justice and fairness…

The economy may not be seen unfiltered. Rather we see it in the way it was instilled through the educational system. It was instilled in us with a very specific picture of the economy. That is the picture of the Homo Oeconomicus, the person who thinks firstly

only of himself, who is not interested in his fellow-persons and secondly can know nothing of his fellow-persons since he is completely cut off from them. He only knows the price of the commodity but knows nothing about how this price came about or about the people who produced the good. That is a picture of our economic perception. For that reason our perceptions are deeply unscientific.

The Homo Oeconomicus has its origin in theology; it is connected with a certain simple piety, with the idea that a person cannot claim to know too much because life is ultimately guided by God’s invisible hand. The autistic person who only focuses on himself gains as much as possible, gives as little as possible and wants to know nothing of his fellow-persons was made the cornerstone of our society. Perhaps you know the foundingthers of the social market economy, Franz Bohm, Alexander Rustow, Walter Eucken and others were also the founders of neoliberalism. The originators of the social market economy were identical with the founders of neoliberalism.

I know neoliberalism is mostly confused with American imperialism or American neoconservatism. However that is only an example of how neoliberals have completely succeeded in dominating human thinking. I have grappled in detail with the writings of neoliberal theoreticians who established the social market economy that all the parties had to acept if they did not want to be stamped as enemies of the constitution. First of all, neoliberalism starts from the impossibility that the participants of the economy can know anything about one another. Therefore it faces the question: how can order come into chaos when no one can know anything of the others?

Earlier the father of the family could see who needed what, who had what abilities and whether it was better for everyone’s well being whether the son chopped wood or grew wheat. In the world economy, everyone depends on everyone being in the right place and the right amount of goods produced. However the economy has become a great network that no one can survey anymore. The neoliberal thesis is that an ordering system is needed to replace the judgment of the family father. People can know nothing of each other. Walter Eucken devised the right system for them so the economy does not become chaos. Thus the social market economy arose and neoliberal think tanks built all over the world starting from Germany drummed the idea of the perfect economic system into heads. Now it has become a chaos.

In 2012 approximately 30 million had to die an excruciating death from starvation, even people who had worked for the world market. Why? People did not want to know anything of one another… What must be known to judge the economic process rightly and know the right measures today for our well-being tomorrow? Every day what the farmer needs for life changes. The price structure changes continuously because it depends in a dynamic way on genuine life on what the farmer needs today and will need tomorrow. It also depends on whether the soil quality will be better or worse. The price that the farmer must receive for his grain depends on many factors that only the farmer can know. How can I know this?… I must slip into the role of merchant because the merchant knows what he can sell at what price… Ultimately I must slip into the role of consumer to know what the consumer wants, what he needs and whether he can have it at

that price. To make a true statement about the economic process, I must leave my own skin.

A total knowledge of the economic process necessitates leaving my own skin and putting myself in all people involved in the value-creation… Still the economy is not a private car but a living process that moves and shifts as the expert knowledge of individual persons interact and this expert knowledge meets the needs of individual persons who are living and nature which is also living. This is something fluctuating and dynamic. To guide this, one must feel what every individual feels, observe what everyone sees and what everyone wants. Because this is impossible, I realized after long reflection I cannot dream up the best economic system…

In reality one can create the possibility that the expert knowledge is carried out, that the many limited judgments can combine and be communicated so what is practically possible out of the collaborator of individual judgments becomes concrete. As a result, one stops being a Homo Oeconomicus and begins to see the abilities and needs of his fellow-persons. That is the consequence as soon as one refuses to hit his head against the wall, that one abolishes the Homo Oeconomicus and realizes the possibility of a mutual perception. The consequence is that one annuls the Homo Oeconomicus by being interested in others… The grain prices rise or hit the roof. The actual costs of agricultural production must be the starting point and a middle way found between the interests of farmers and the interests of retailer5s and workers found so all the concerned can live.

They dialogue with one another and begin to be interested in others. So one can tackle reality and approach the ideal of justice or fairness.

As soon as the prejudice of Homo Oeconomicus is abolished, all theories are also annulled since there will be nothing to theorize any more. Then the superstition of the invisible hand that guides our fate and even marks the Greens-party program gradually loses its appeal. How can this mutual perception become more practical?… Not all the participants in the value-creation chain are at the table. For example, I do not sit at your table although I am part of the value-creation chain. I am part of the value-creation chain.

I am one of your customers….

Now Christmas is here and people run about with the idea of brotherliness in their heads.

Settled in heads, brotherliness hardly becomes concrete or takes root. Brotherliness cannot be present ideally. It can only be present when realities are created where people who share in the value-creation see one another. If they cannot see, they have no other choice than to act selfishly. Therefore your initiative is so important. It creates the possibility of being unselfish. A reality simply opposes the ideology… We must represent equality before the law and freedom in the spirit really and not only as ideas.

The name of the institute is Institute for Social Three-Member Diversity (Dreigliederung). Perhaps we could talk about that…

THE NEOLIBERAL DIALECTIC AND THE ANTHROPOSOPHIC ECONOMIC MODEL

By Johannes Mosmann [This public address from 3/4/2010 in Sinnewerk, Berlin is translated from the German on the Internet, http://www.dreigliederung.de/essays/2010-03-001.html.]

Ladies and Gentlemen, In 2009 I attended a congress at the TU (Technical University) called a “McPlanet.” The motto was “Game Over – New Start!” Our economic system ended with the financial crisis. Now we are ringing in a new era. At the beginning of 2009 many believed the financial crisis had to lead to a total breakdown of our capitalist economic system. In this expectation, 1700 young persons came together from all over Germany at the TU Berlin for answers to the questions what is necessary for a new start, where can we begin and what can we do from representatives of diverse NGOs and Gos as for example Heinrich Boll foundation, attac, Greenpeace, FIAN and others. For two days there were presentations and discussions. On the evening of the 3rd day, the plenary from the most represented organization announced the common conclusion. Hundreds of people, mostly youth, stared spellbound at the way ahead. Then the idea for the new start appeared: politicians should finally do something!

Imagine 1700 youths with fresh spirit, full of energy and hope who make redundant our civil rights activists: those above should do something! Every hope, every impulse and every possibility for tackling and transforming social life was nipped in the bud. What was wrong there? What mentality was manifest? How can this consciousness be characterized? The organizers of the congress were surprised by the people who came to the congress. That was a surprise. They did not expect actors of the social life. People were not included with their social plans for people. They dreamt up plans for people in which the people could not found did not appear! What do these “social” organizations expect when they do not include people?…

One hears the same everywhere, everyone thinks the same whether left or right, whether materialists or anthroposophs. What makes the answers so monotonous and what underlines the synchronization or enforced political conformity is the real crisis and the real catastrophe. Consider the following demands: “With a special tax, massive funds could overcome the consequences of crises and future-friendly reconstruction of our society… Tax havens must be dried up and hedge funds and highly speculative financial products prohibited. Banks are service providers of society and should be under consistent public control. AQ financial transactions tax could check speculation and finance the consequences of crises. The casino must be closed…

The international Monetary Fund (IMF) and the World Bank must be democratized and their programs oriented to social-ecological criteria. Crisis management and re-regulation of the world economy should be discussed in the framework of the United Nations…

Export-subsidies of industrial countries should be abolished and speculation with food prevented. Trade with agricultural goods must be regulated outside the World Trade Organization. We demand food sovereignty instead of businesses with hunger!” Do you

see? All this hangs in the air! Who is the subject? What does this mean – this should be abolished? Who abolishes and who is the subject?…

A petitioner abolishes nothing. Attendees of the meeting abolish nothing. All socialism is exhausted in dreaming up what someone else can do. One has excellent ideas for others but not a single idea for oneself. No demands are made on oneself. The notion that one could be an actor of social life and have something to do with the financial crisis is repressed. What is a subject? Who is the other who should act in our place? The subject is some kind of central organ, the state, the IMF or the UN. This central organ should prohibit something, pass regulation and coerce people. That is clear. When people are not included, people are forced and controlled from the outside by some super-authority.

Every socialization measure that is dreamt up ultimately amounts to a person being demanded and forced by a central organ…

The state should help the starving person, the state should democratize the bank, the state should take away speculators’ money, the state should give us a basic income, the state should provide us with work, the state should fully finance our schools, the state, the state, the state. This state must be omnipotent. The state is God; the state is an idol.

Perhaps you know how the modern state arose, how it understood itself as God’s representative on earth and how it fought with God’s other great representative, the Catholic Church. As the state was Christian, the Catholic church conversely was statelike. They could not both hold out in some phases of their development since state representatives hired the priests and the priests collected the taxes. The territorial state emerged as victor from the battle between two religious-state hermaphrodites. Up to today it still retains something of its spiritual appearance, the aura of the sacred. Letting the state educate his children is hardly incredible to a person as well as surrendering the education of their souls to the hands of the state. The state forms those souls according to its image. The whole disobedience of the children of the state consists in giving a quick prayer to the dear state as occurred at McPlanet 2009. We turn imploringly to Father State and ask to be heard because the state-God rules, orders and creates peace and justice. That is the belief in the state on one side.

Belief in the economy, on the other side, is a little different. The publication of the book “Wealth of Nations” of a famous theologian is commonly considered the birth-hour of the national economy. This famous theologian and moral philosopher was Adam Smith.

Adam Smith sought God behind the bustling activity of humans, behind a drive and behind egoism, not in the state. You know this. Smith assumed the well-being of everyone is greatest when everyone indulges his egoism uninhibitedly. However when a person intends to do something good to another, he would actually do something less good. The theologian explanation is that God works in the person when he surrenders his selfish drive. A metaphor for this work of God has become famous in this connection: an invisible hand, Smith said, increases the happiness of everyone in the moment when the individual only thinks of himself. That is the core of classical economics.

The dear God appears to economic theologians differently than to state theologians. God is more a fate-God, a nature-God… In the “social sciences,” the person acting consciously is ignored. The person is imagined as a puppet hanging by a thread, a remote-controlled unconscious thing. But what if that is not the reality? What if there is no one at the other end of the thread pulling and guiding us into life? What if we guide ourselves, if we have the reins in our hand but don’t know this since we believe in the heavenly helmsman behind us? Then the hypothesis of the invisible hand leads into chaos. I think that is happening at the moment…

People obsessively project the dear God everywhere: an invisible hand, the economy, “the law” or some representative on earth like the UN that brings life… Gerhard Schroeder once said the economy is to blame for unemployment… The dear God has done this. The German chancellor even said, the dear God is to blame. This happens in the 21st century…

The word liberalism is obviously included in the word neoliberalism. Liberalism is the ideology to which Adam Smith was devoted. Adam Smith did not invent this liberalism.

He described how people actually behaved in the England of his time and what faith was expressed in their thoughtless actions… The dominant ideology today that has become a world ideology comes from the German language area: neoliberalism. Neoliberalism is something German; neoliberalism is the German export-hit. Americans adopted it but it originates from Germany.

Neoliberalism arose at the beginning of the 20th century in Germany and Austria and demonstrated at that time that the invisible hand of the economic God carried out an evil game with people. Unemployment, hunger and mass impoverishment were obviously intended by the economic God. Therefore some liberals in Austria and Germany turned to the other God, the state-God. A social science developed in which thinking was thrown here and there between the two pictures of God and driven in a dialectic between economy and state. On one hand, people believed egoism promoted the general interest.

On the other hand, people believed the state must lay down certain rules. In both the Freiburg school and the so-called Austrian school, different mixed forms of the two idols were attempted, between the state and the blind economy. These mixed forms were called the “third way.”

The showpiece model of neoliberalism is the social market economy in Germany…

Alexander Rustow coined the term “neoliberalism.” Rustow understood himself and neoliberalism as a “liberal criticism of liberalism.” He wrote a book titled “The Religion of the Market Economy”… According to Rustow, the state must regulate the economy!

That is neoliberalism! On one side is the free play of the market and on the other side the regulating state… Liberalism desires little state because it presumes a magical socialization power in egoism while Marxism emphasizes much state because it sees throu9gh the specter in this relation. The intermediate form between these extremes is neoliberalism. There are different varieties within neoliberalism with finer points around the kind of regulation, the kind of tax as for example the Tobin tax and so forth…

The demand that the financial market should be regulated is a neoliberal position!…

Consciousness must come from the outside since making profits depends on knowing nothing of the consequences of actions and that actions have terrible consequences. There must be a monitoring from the state side. The state must regulate from the outside to make the economy and justice possible since the economy depends on ignorance. This is the logic in which we are all caught. We all start from an assumption… and remain captive in neoliberalism… This thesis is made into an economic law when the thesis that the economy only knows egoism is reinforced. This thesis is made the untested assumption for all thinking about the social. The focus of inflammation is in the social organism. That is the origin of egoism in the economy! That is the great ideology at the beginning of all social evil of the present!…

I read Milton Friedman. When you read him, a view of the person seems projected by our economics. In Friedman’s thinking, human consciousness seems like the atom…. Social life is brought about by the collision of encapsulated humans enclosed in themselves.

These human-atoms only know what they want to have and what they can give. This is all the person needs in consciousness, according to Milton Friedman. Why something is expensive, what happens in the factories, what are the needs of workers, how conditions of production change and so forth do not need to interest anyone. One only needs to know it is expensive. All of these atoms whirring around is not a chaos because these atoms are ruled by a natural law. This law ruling people from the outside is the market mechanism, the invisible hand. You can see in Milton Friedman that neo-liberal thinking is never really thought out…

We should stop polemicizing against neoliberalism and look at this neoliberalism in an unbiased way to know where its errors are. Firstly, a person cannot know anything. This is the first hypothesis. Therefore one seeks an invisible hand. Then the invisible hand is justified so that a person doesn’t need to know anything thanks to this invisible hand.

Suddenly it becomes a doctrine of salvation! Finally the question how the invisible hand functions is answered: a person cannot know anything if the invisible hand is to function.

This turns the world upside down. A coercion comes out of the hypothesis. At least Milton Friedman is not inconsistent. He demands state protection of ignorance. The state should ensure no one can know anything through monopoly laws, bank secrecy and the like. From the hypothesis of ignorance, knowledge can be prevented with force to test the utopia of the invisible hand.

Without ignorance, one could not hope for the grace of an invisible hand. Economic policy:creates space for the imaginary invisible hand by cutting off the connections between people. The state ensures people can know nothing of one another. Economic theologians describe the invisible hand as a mechanism, a “market mechanism.” What characterizes this mechanism, this natural law? First, a good becomes scarce and there is no longer enough for everyone. Those who can afford it offer more for the good to guarantee their provision. The producer can take more for his product. Prices can increase because there are enough people who buy it. The possibility of higher prices awakens the greed of other people. They begin to produce the same good in expectation of high profits. This leads to increased production. The product then becomes cheaper. Some

time or other a balance occurs between supply and demand. That is the theory of the machine.

To keep the machine running, we have politicians. That is the job of politicians that we expect from them. They should increase the “purchasing power” of the poor man through tax cuts, prevent price agreements, promote Germany’s “location,” redistribute profits and so forth. This is always maintenance work on the imaginary machine. Let us look closely at this machine. First, a good becomes scarce. But what does it mean that a good becomes scarce? This means people suffer want! Shortage rules, something is lacking!

The mechanism presupposes this shortage.

One must remember what things mean in reality. The good is scarce! People die of starvation! Then

THE WORK SOCIETY AND THE WORK RELIGION

by Ernst Lohoff Work is only a part or fragment of life. Where it becomes everything as a steamroller or religion, it leads to idiotism where social questions and reproduction are ignored.

The crisis of the work society is obvious. Belief in new jobs for hundreds of thousands is unrealistic.

[This article is translated from the German on the World Wide Web, http://www.balzix.de/e-lohoff_tischlein-leck-mich_jungle-dez2002.html.]

Work ends in the work society. This was regarded as settled in the late seventies and early eighties in the alternative-left milieu and at sociologist conventions. The revolution of microelectronics changes mechanical typewriters and the commodity labor into unmarketable anachronisms.

The uncoupling of wealth production from labor must lead to a fundamental “change in social values.” A new “post-material orientation” (Ronald Ingelhart) can already be seen everywhere. An “activity society” (Ralf Dahrendorf) appears that consciously breaks with the primacy of paid work.

SUPERFLUOUS PEOPLE A quarter of a century later, the first part of the prognosis is confirmed. The mass of human material that is unusable for globalized capital and superfluous for the work society grows.

This development coincides with an intensification of the dictates of the work society instead of its relativization. The work society was never emphasized as much as today.

The more precarious the long-term perspective for workers on the labor market, the more resolutely everyone feels obliged to see the successful management of his “human capital” as the greatest happiness on earth. The crisis of the work society became a reality and disappeared from public debate.

The dominant consciousness sees inflexibility and social parasitism everywhere.

“Washouts in pin-stripe suits” who led businesses into cul-de-sacs are highlighted along with encrusted social state structures that must be unconditionally broken up. The idea that the work society imperative could be the real problem cannot be mentioned any more.

Since time immemorial, people have been accustomed to the political class fiddling with empty formulas and lies. However the political class takes a step further today and only refers to the social reality in a hallucinatory way. The government, opposition and the assisting “experts” only know one Modus operandi, the unreal. The deconstructivists only

interpret away the world of crises. Cleaning up or decontaminating reality was central under Gerhard Schroeder and Peter Hartz.

The worldwide economic structure cracks. In Germany, people have heard nothing about this amid the most provincial positional debates. Since the end of the New Economy, the bottom has been taken out of the work society while wild reformers bluster about new jobs for hundreds of thousands.

In the recession, the first labor market should now incorporate the people who found a place in the second labor market during the casino capitalist boom. The government declares war on unemployment. However in a strange renaming, this war does not go beyond a war against the unemployed. The chancellor closes the employment offices and reopens them as job centers. The chancellor does not know any unemployed persons, only personal companies and employees of personal service agencies. That their weekly working hours usually lies at zero hours is hard to see in the small print.

THE INHERITANCE OF CASINO CAPITALISM Not only the political class flees into denial of reality. What yesterday was a twisted theory is a vulgar social practice today. Signs of the real substitute for the real. All reality dissolves in discourse reality. Half of the economy depends on psychology. We are told to think positively and ignore the other half.

These are bad times for satirists. A people of real satirists make them superfluous. These are also bad times for ideology critics as long as ideology describes false consciousness.

The zeitgeist or spirit of the times has much to do with a ghost parade and little to do with consciousness.

His amanetic-hallucinatory state cannot be reduced to a single cause. It can only be described as a mixture of different anesthetics and the result of a whole motive cocktail.

The inheritance of the casino capitalist phase is certainly one of the main ingredients. In the eighties and nineties, the work society successfully minimized its fundamental crisis at least for its core personnel. At that time it finished the work of art of making the anticipation of future work into the foundation of present work.

The pipe dreams of the IT-branch (in the supposed future sectors) provided an unparalleled boom and lucrative jobs for a vast multitude. The dynamic of fictional capitalization supported by these sectors, the capitalization of expectations, created a considerable economic growth and artificial employment.

This economic wonder of the 20th century is over. The material substrata of simulation has dissolved, namely the belief in the future of the work society monetarized in private credit creation.

However the corresponding forms of consciousness have not gone up in smoke. In the

turn to hallucination, simulative thinking elevates itself above its real conditions as a substitute. After the dream of new capitalism, the deregulation of total individualized competition as an eternal capitalist spring was discredited. The phantom should be renewed through generalization. When everyone, above all the forgotten losers, is committed to complete self-adjustment as market subjects that in the past was a special privilege of the so-called winners, then everything will be good!

THE NEW INDEPENDENT PERSONS A sadistic moment vibrates in the post-casino-capitalist spirit dance. Everyone must do what the “top performer” did and does – without gratifications. In this revenge on the broken and revenge for everyone, hopes are hardly distinguished from nightmares.

This alone cannot explain the superstitious readiness to accept cuts in the social net.

Auto-suggestion is more important. Defeat is reversed into a victory in a society where the poses of the autistic victor and the pressure to sell oneself have become second nature.

The “new independent persons” of the avant-garde sectors teach us today that flexibility makes for successful persons in vocations and consumption. Top employees take to the barricades with income losses of a few ridiculous percent. The new IT-independent person remains cool and casually accepts a 50% cut of his income. He probably makes a sovereign figure in eating out of the dumpster.

Advertising has long recognized the signs of the times. The figure of the “new loser,” as the Frankfurter Allgemeine Zeitung newspaper calls him, gets ahead in life by imagining himself in a win-win situation under all circumstances. Ikea is proud how the housing crisis allows new problem-free accommodation to the surface area of a prison cell. The slogan “stinginess is cool” makes the rounds. That this new art of auto-suggestion actually spreads “one to one” in everyday life is even more spine-chilling than these aestheticizing neo-ascetic acts.

Two years ago at a birthday party, I was annoyed about a guest active in the advertising branch because he bragged that none of the bottles of wine cost less than 30 marks…

AT THE LEFTIST CHILDREN’S TABLE In ancient Greece, the term “idiot” described persons who only worried about their personal affairs and were indifferent toward all far-reaching questions concerning the polis. This idiotism term deserves to be rediscovered in its old meaning.

As an analytical category, idiotism describes the ability characteristic of the post-modern subject to fade out all larger contexts in thinking and treat all experience not involved with selling oneself as non-existent. The term identifies what the process of social conformity commonly celebrated as individualization means through isolation on the plane of consciousness.

The transformation of the church of work into the greatest esoteric sect of all times and the galloping idiotization process cry for a resolute counter-position. Its first challenges would be simple. It has to show what many know but no one wants to know. The emperor is stark naked. The work society cannot be saved and there isn’t the least reason to save it.

The pressure to sell oneself does not rhyme with happiness and self-realization. A good life begins where the winner’s sneer ends. The debate around the crisis of the work society that began 20 years ago could be revived again not to relativize the rule of work but as an attack on the logic of competition, economic commercialization and labor.

By allying the social question with criticism of work, the left could find its way out of its persistent defensiveness and marginalziation. However the left misses this chance.

Committed to the work religion, the reformist wing is afraid of overturning the official round table and at best receives a little place in the baby’s chair.

The so-called radical left plays an even more miserable role. It appears wildly resolved to play the avant-garde in the general globalization process. In official discourse, social reality disappears in the countless talk shows where absurd employment programs are seriously discussed. The social question and reproduction simply do not occur in the left oriented in ideology criticism and culturalist-post-modern idiotism.

Most people face precarious conditions and an uncertain future. These questions are treated as private problems, not social problems. The social romanticism of the seventies has capsized into its opposite. The mob always lurks behind the social question. Whoever faces it is a reformist in the best case and approaches anti-Semitism in the worst case.

The batch of crises of the early 21st century seems to intensify this development without neutralizing the mechanisms. The end of the magnificence of the New Economy coincides temporally with processes of decay revealing the violent core of commodified subjectivity striking back on the West. The post-modern culturalist “Don’t worry, be happy” in the old form is put in question.

The new barbarism is only an occasion to escape… Scene members swear by individual solutions in competition while western normality dissolves…The rabbit runs toward the unreal.

Only one conclusion remains for an anti-capitalism that takes itself and criticism of work seriously: The little leftist side table has to be overturned outside the great social roundtable where the non-existing future of the work society is discussed.

THE GREAT DEVALUATION - INTRODUCTION Ernst Lohoff and Norbert Trenkle http://www.krisis.org/2012/the-great-devaluation-introduction Walther Rathenaus’ hundred year old dictum “The economy is our fate:” sounds threatening today. The economy, the Holy of Holies of this society and its practical pivot, is out of control. Until recently the economy was regarded as the refuge of a higher reason. Today in reading economic news, we feel regularly transposed into a lunatic asylum. Since the subprime crisis brought the global financial markets to the edge of collapse in the fall of 2008, the world economy has only been stabilized for the shortterm. The political movers and shakers and their economic sages had hardly proclaimed the “end of the crisis” in an instrumental optimistic way when new bad news was at the door. As soon as one fire or troublespot was buried with new masses of fresh money, the fire blazed at two or three other corners of the capitalist world system. Through the emergency nationalization of rotten credits, a policy of the cheapest money and massive state indebtedness, governments and central banks successfully averted the threatening global economic collapse. However they only prepared the next, even greater crisis. Now the bursting of the state bubbles threatens to drag the world economy to the brink.

A catastrophic confusion of opinions accompanies this dramatic development. Hosts of dece4ivers explain to the public at what point “our economy” diverted from the path of free enterprise virtue and with what therapies the lost economic reason can be drummed into our heads again. The authors of this book do not join in this charade. They regard the assumption underlying the current debate that the present crisis can be solved with the capitalist production method as essentially inverted. The alleged “degeneration” of the glorious market economy responsible for the present disastrous state of the capitalist world system is understood as a revelation process. The capitalist production method is an extremely irrational form of wealth production programmed for self-destruction.

Deregulation of the financial markets, speculation, excessive state indebtedness or whatever else is offered on the market of opinions as causes of the present malaise are in truth only symptoms of a much deeper crisis process. We face the dissolution of the foundations of the capitalist world system, not some “malformations” that can be cancelled.

This idea is taboo in the public debates with the loud ostentatious “capitalism criticism” hurled at us from all the media. This criticism is largely limited to crash bashing of the financial markets – undergirded with personalized condemnation of “bankers and speculators.” The obvious insight that the system of capitalist wealth production could be untenable is repressed. Reality presses to the idea of a fundamental crisis but the dominant consciousness with all its strength diverts from this reality. The fear of a great catastrophe is certainly in the air. However this remains diffuse and channeled either in esoteric fantasies of world destruction like a supposed Maya prophesy, wildly

proliferating, partly anti-Semitic, conspiratorial fantasies and individual attempts at escape from the daily routine or is contained by the notorious faith healers who trivialize the crisis by means of their sedatives or tranquilizers.

The silent background of this schizophrenic mood is the social-psychological preparation of modern individuals after thirty years of radical economizing of all areas of life that make another form of social interaction than the commodity form, spending of abstract labor power and money seem impossible. In addition the dogma of the lack of alternatives to capitalism is conflated to common sense with the collapse of command socialism. “Command socialism” was nev3er anything but an authoritarian variant of capitalist modernization backed with a bizarre ideology of the “dictatorship of the proletariat” and in no way stood for a perspective of social emancipation. However its existence alone seems proof to many that there can be an alternative to the orientation of all social relations according to the principle of economic rationality. For that reason, its destruction has not expanded the horizon of emancipative thinking but on the contrary cements in heads the lack of alternatives to the free enterprise-capitalist way of life and production. The notion of a fundamental system criticism is implicitly under a taboo in that the mere possibility of an emancipative mastery of capitalism is dismissed as a crazy idea of unrealistic dreams and incorrigible diehards. It cannot be understood as a crisis of an obsolete historically-specific production method but appears as an apocalyptic event like a global nuclear war or the crash of a giant meteor by parts of the political class. The austerity commissar Peer Steinbruck said he “looked into the abyss” in the shock of the financial market crash. A spontaneous horror at the consequences of one’s actions is sometimes expressed. But this ultimately serves as legitimation of those drastic austerity measures and sacrifices exacted on the population to keep the economic dislocations under control. Thus the apocalyptic vocabulary stands here for a variant of the notorious TINA-principle: There Is No Alternative. This sentence was never presented so often and so full of conviction as after the bursting of the real estate bubble and the shockwaves triggered by that bursting. One cannot be squeamish when world destruction threatens.

The many crisis gurus that have appeared since the fall of 2008 use this model. Their success is based on their addressing a subliminal social mood with their alarmism and painting pictures of overwhelming dislocations in contrast to the squad of faith healers and appeasers. But despite everything they share the social consensus that the crisis doesn’t have any fundamental systemic character but can be solved through resolute political actions and intensifie4d austerity efforts. The idea that the capitalist production method can become untenable and be carried out ad absurdum is completely alien to them. Fixated on the surface of the crisis, they polemicize against alleged “malformations” like “boundless state indebtedness,” “excessive claimant thinking” or unrestrained speculation” that must be finally stopped if society doesn’t want to be swept into the abyss. According to the crisis-gurus, the restoration of a healthy prosperous capitalism is only a question of political and social will. They cheerfully join in the great trivialization, The most successful German representative of this guild, Max Otte, understands the crisis as a chance, as a collective and individual occasion for successful re-positioning in the

capitalist competition and obviously not as a change for developing a counter-praxis to the current madness (Otte 2006, p.193). The opportunity to improve its position in the world market competition is offered to location Europe. Excellent possibilities for multiplying its last few pennies on a “bear market” are proffered to the clever investor.

Despite all the economic dislocations, a shaking of the foundations of the capitalist system is inconceivable for Otte. The world market continues functioning to the end of days. The holiest determination of human existence will never be changed. Optimizing one’s capital formation will always be possible and remains the center of all earthly striving.

The prognoses and diagnoses of the diverse crisis-gurus differ in their details. In his book written before the crash of 2008, Otte interprets the crisis primarily as a deflation crisis in which stock price s fall and securities change into junk. Other authors warn of a collapse of the international monetary system and of a hyper-inflation. This fear is in no way taken out of thin air. The current crisis process must flow into a crisis of money and of the monetary system. We will discuss this in the second and third parts of this book. Today’s monetary order with the dollar as world money and the Euro as the second key currency cannot hold on in the long run. This development was long everybody’s secret. The crisis-gurus cannot look into the dark tunnel without seeing a golden glimmer at the other end. The prescription presented by Nathan Lewis in his book “Gold. The Currency of the Future” (Lewis 2008) enjoys great popularity among other great and small neoliberal crisis-gurus. The states, Lewis says, should allow indebtedness and return to a gold-based monetary system. Then the monetary foundation will be created for a renewed, solid and prosperous world economy.

Such proposals can only be made when all sense for the logical and historical development of the system of capitalist wealth product ion is lacking. That this grew in the course of many decades from the gold currency was not an accident or the result of a mistake of misguided politicians that could be cancelled as Lewis and his kindred colleagues imagine. Rather it was the result and prerequisite for the enormous expansion of capitalist product ion and its triumphant march over the whole globe. The capitalist growth-push of the last decades would never have been possible ion the foundation of the “barbaric metal” (Keynes) subject to a natural limitation because of its material substance. The transition to pure credit money was indispensable. It is entirely conceivable that attempts will be made to dock national currencies to gold in some way at a late stage of the decay of the world economy and the breakdown of money. However such monetary reforms would be the result and development of a disastrous shriveling process of the system of capitalist wealth production. They have as much to do with a future-oriented reconstruction as the spontaneous formation of cigarette currency after the Second World War… Dubious crisis-gurus like Otte and Lewis are not the only ones who lack any understanding for the fundamental character of the present crisis process. If the largest part of the public debate on this theme clings to the surface of events and the symptoms of the crisis are mystified into its causes like the independence of the financial market or the exploding state indebtedness, that reflects more than shrinking from the enormous

range of the capitalist system crisis. Economics across all rival schools is unable to conceive a fundamental crisis with their basic theoretical assumptions and paradigms but immunizes itself.

Since the days of Adam Smith and Jean-Baptiste Say, economics almost without exception resisted that capitalism produces crises out of its inner logic. Even though the capitalist dynamic obviously produces constant imbalances and incongruities that detonate in crises and always are contained by merely provisional solutions, the economics marked by classicism and neoclassicism see reliable guarantors of balanced states in the market. According to their understanding, economic crises on principle cannot be explained by an inner economic crisis but by definition are the result of exogenous or non-economic factors like natural disasters, wars and political slips. In this way, all these crises that accompanied the rise of capitalism were already ideologically mystified. The inner capitalist contradictions that inevitably had to lead to recurring dislocations were defined away. With Keynesianism, an economic school arose for the first time in view of the worldwide economic crisis of the 1930s that partially weakened this dogma while continuing it in other ways. According to Keynes, the preference of money over other forms of wealth (“liquidity preference”) can impair the production of economic balance and bring about a structural under-employment by removing this potential disturbance through corresponding monetary and fiscal-political measures. The state comes into play as an actor. However its task consists in restoring the harmonycreating power of the market where this was suspended by temporary disturbances.

Even if all past crises were successfully trivialized, it cannot be surprising that a fundamental crisis of economics seems completely unthinkable. The economic definitions and basic ideas developed in the last two centuries do not allow the formulation of such an idea. As long as they are stylized as self-evident foregone conclusions, immunity is guaranteed whatever picture of the capitalist world system may occur empirically. In the last years given the rage of the crisis, some representatives of economics condescend to discuss the “end of capitalism.” Like the dubious crisis-gurus, this emphasis on second view turns out to be a mere code for an alleged “derailment” of the market economy which only needs to return to the true path of virtue.

Capitalism is evil and the market economy is good. That is the credo that always only denounces “excessive speculation” on the financial markets. In this version, arch-liberal hardliners like the flat tax propagandist Paul Kirchoff are invoked. In the ZEIT-series “Is Capitalism Finished,” he pleads for a “responsible market economy” and insists “we may not be driven into a corner by a financial market that has become wild” (Kirchoff 2011).

This distinction of “market economy” and “capitalism” has a tradition. In the era of the Cold War, it was the core of the West’s legitimation ideology that sold its “social market economy” as the third way between capitalism and communism. In the era of crisis capitalism, it gains new importance in warding off the threatening idea that the whole system could be up for disposition. Still the roots of this base immunization go much deeper. They arise from the self-image of economics which itself is a child of the capitalist production method but cannot speak of this historically-specific form of

socialization without mystifying it into a general human way of life. Where the exploitation of capital hardly calculable in the capitalist reality – the abstract end-in-itself of making more money out of money – is the pivot of the economic process and production of goods is merely the secondary means to realize this goal, economics wants to see nothing but harmless “goods production” as it always existed since the ancestors of Homo sapiens climbed down from the trees. Every economics textbook begins with the unquestioned axiom that t6he purpose of the economy is providing people with useful things and goods production, money and the market are only presented as very sophisticated means to reach this goal, the organization of the social division of labor and the “optimal allocation of resources.” The essential reversal of means and ends that belongs to the nature of the historically-specific character of the capitalist production method is made invisible. The resulting inner contradictions are extinguished and the notion of a crisis resulting from them becomes meaningless.

A special incompetence of this generation of economists cannot be made responsible when the crisis analysis of expert economists turn out so superficial and helpless. The problem is its basic structure, not the deficient command of economic instruments…

Whoever wants to understand this in its depth must change into another theoretical reference system that breaks with the base harmonist assumptions of economics and can grasp the historically-specific characteristics of the capitalist production method.

150 years ago Karl Marx laid the foundations for such a theoretical reference system.

Starting from a criticism of goods production and its inner contradictions, Marx described the capitalist production method as an extremely irrational fetish system governed by an uncontrollable historical dynamic that ultimately must bring about its own selfdestruction if humanity does not abolish it. Astonishingly these insights didn’t play any practical role in the past crisis debates. In the last years there has been a certain “Marx renaissance.”… The insane pranks of crisis capitalism and the unreasonable social demands that it involves awaken a longing for principled social criticism for which the name Marx is a kind of code. The real explosiveness and actuality of Marx’ criticism of political economy is more blocked than revealed by such reminiscences.

Some conjure a return of the class struggle and reactivate that part of Marx’ theory that had an enormous effectiveness ideologically and politically in the past. This may be hopelessly outdated today. Marx as a chief witness for the abridged criticism of unfettered financial capital that supposedly “overgrew” the “real economy” and therefore must be restrained. In his time, Marx sneered at these middle class fantasies of a healed capitalist world. Finally there are academics who bring down Marxist thinking to the theoretical reference syst4em of economics and thus rob it of its critical substance. They declare Marx a kind of predecessor of Keynes or put the subjective value-theory of neoclassicism on him. On the other hand, that part of Marxist theory that has its full explosiveness today, the fundamental criticism of goods, labor, value and money and the crisis theory based on that is almost completely fade4d out.

If we follow this theoretical strand and develop it further, capitalism and its crisissusceptibility appears in a very different light than in the axiomatic and unhistorical

harmony models of economics. The historical crises that cannot be explained within this model point to the irrational and self-contradictory character of the dominant production method are also stepping stones on that long way that leads this method to its inner limit.

The narrow-minded end-it-itself of capital exploitation is incompatible in the long run with the enormous potentials of material wealth production that it produces because that process goes along with an inexorable reduction of necessary working hours in goods production. Under different social conditions, these potentials could be used to make possible a good life to all people without destroying natural life and the foundation of life. However under capitalist conditions, the constantly increased productivity undermines wealth production and the foundation of capital exploitation. Therefore a point must be reached sooner or later at which the attained level of productivity becomes incompatible with the capitalist form of wealth.

Seen this way, the current worldwide economic crisis in no way a result of excessive speculation and indebtedness for which the bill must be paid now. Conversely the gigantic inflation of the financial markets as a reflection that the labor force in the core sectors of capital exploitation has become “superfluous” and wealth production is declining absolutely. The triggered structural crisis that was clearly manifested since the 1970s as a crisis of labor could only be outplayed and delayed by the enormous accumulation of “fictional capital “on the financial markets. The devaluation of that fictional capital now swings over the whole world as the sword of Damascenes. The superficial all-clear crisis announcements are as wrong as the Cassandra cries of the crisis-gurus who admonish conversion to a “healthy market economy.” Just as invertedly as the all-pervasive demands for “taming the financial markets.” The fundamental structural crisis may be delayed by another inflation of fictional capital and different measures of emergency administration but cannot be solved within the capitalist logic. If this logic is forcibly maintained, a great c catastrophe threatens as the crisis intensifies. It can only be averted if a social alternative can be developed and implemented globally beyond goods production.

The arrangement of this book follows the following structure. In the first part – written by Norbert Trenkle – several basic ideas will be explained that are indispensable for understanding the historical dynamic of capitalism and its underlying inner contradictions. Then we will investigate how this contradiction became a vital motor of capitalist execution in the postwar boom and then changed into a driving force of a fundamental structural crisis in the course of the third industrial revolution. A selfsustaining push of capitalist exploitation is not possible any more on the achie3ved level of social productivity.

The fundamental structural crisis can be delayed through the inflation of the financial superstructure. The second and third parts of the book – written by Ernst Lohoff – carefully analyze3 fictional capital. Part 2 develops the theoretical foundations for understanding this sort of capital and its position in the capitalist accumulation process.

He shows that the property titles from which fictional capital is composed represent a special category of commodities, goods of the 2nd order that have a future value and a

specific practical value. Whether and under what circumstances this anticipation of the future can be fulfilled and where the logical limits lie will be explored.

Part 3 analyzes the ranking and function of fictional capital in the historical course of the capitalist development method. If it was only of secondary significance in the age of the industrial revolution, it already played an important role in the epoch of Fordism as an impulse-giver and motor of accumulation since the enormous investments necessary for installing industrial mass production could only be financed through anticipation of the future. While this anticipation could only be fulfilled through actual wealth production, this is not possible any more in the era of the third industrial revolution. Fictional capital changes into the motor of accumulation which can only be maintained through a repeated anticipation of the future. However a gigantic devaluation fictional capital must occur where limits of this anticipation are reached. This devaluation reveals the underlying structural crisis and must also be expressed in a devaluation of the money medium.

Several theses on social emancipation in light of the crisis are offered as the conclusion of the book. The so-called “austerity pressure” as invoked with the picture of the “Schwabian housewife” is a complete madness that only results from the mad logic of the constant production of social wealth as a waste-product of capital exploitation under the standards of “profitability” and “financiability.” If we can be free of this project, it turns out that “we” in no way have lived “above our means.” Rather the society has been too rich for the narrow-minded form of capitalist wealth production. The existing potentials of productivity can only be used reasonably and meaningfully to make possible a good life for all people and to permanently maintain the natural foundations of life if this complete madness is excised..