Unemployment and New Ways

UNEMPLOYMENT AND NEW WAYS


Whoever says something is not right should not disturb the actors


By Jessica von Haeseler


[This reading sample published in 2005 is translated from the German on the Internet, http://www.grin.com.]


Foreword


"A life of activity and developing the intellectual, moral, physical and emotional potential in a happy life" [1] Mary Daly


True happiness is inaccessible to the majority of the German population since they must spend the bulk of their time worrying about their provisions and the provisions of their children and relatives and their own functioning within this system in order not to sink deeper. The hope is to share in the future social life with an acknowledged life with money and a job far from poverty.


However, a job does not mean real protection. Poverty in Germany and worldwide is multilayered and growing relentlessly. Poverty is a stable component of our social order. Poverty makes possible the wealth of a few, creates scapegoats and envy and drives a wedge between the lives of scattered persons. Joining forces with the like-minded to demand common rights becomes more and more unthinkable on account of their "debt." Still, relying on oneself, a person is handed over and becomes powerless. He or she becomes a soft plaything in a nearly incomprehensible complexity of little systems that interlock. Besides, a "culture is a very thin veneer that easily dissolves in alcohol," [2] as Aldous Huxley correctly recognized.


How can the growing unemployment be limited with its lane of poverty? Are there ways to more solidarity, cooperation, and resources for persons lacking them?


In this study, I would like to trace how estrangement between persons arises in capitalism to show alternative possibilities to bring individuals closer to one another.


Clarifying Concepts


"Speaking abstractly about evil and silently supporting traditional ideas legitimating specific social misuses is not enough" [3] Mary Daly


Economy


The term economy comes from the Greek Oikos, house and nomos, law. According to Max Weber, this covers "all forms of production and reproduction of human living conditions including in-house work and housework, both the visible and invisible economy." [4]


The economy influences all social, political, and ecological areas of today's capitalist society in which the individual is usually measured by his/ her economic value.


The Local Economy


The local economy is part of the public interest economy, a "human-centered development model oriented in the needs and capacities" of individuals and focuses on the social whole and the household of nature." [5] The goal of public interest economic conduct is ensuring the survival of person and nature, consideration of social costs and benefits in the direct environment as well as overcoming "experiences of individual devaluation-, breakdown- and exclusion" [6] accompanying the spread of the capitalist economic order, its profit, and competitive linking.


The local economy is part of the networking of all economic activities within a region. [7] Neighborly help, community aid, voluntary work, and exchange rings count here alongside private enterprise.


Complementary Currency


"A complementary currency involves… an arrangement within a community for accepting a currency that is not a national currency." [8] A complementary currency is more a supplement and a counterbalance for monitoring cooperation instead of competition and less a replacement of the conventional currency. [9]…


"The need for constantly expanded sales for its products chases the bourgeoisie around the whole globe. Everywhere, it must settle, grow, and make connections. Through its exploitation of the world market, the bourgeoisie organizes the cosmopolitan production and consumption of all countries. An all-round transportation and a general dependence of nations replace the old self-sufficiency and isolation… In civilization, the bourgeoisie tears through the rapid improvement of all instruments of production and through the infinitely easier communications of everyone, even the most barbaric nations… With one word, it creates a world according to its own image." [10] Karl Marx


The motor of this generally criticized market expansion marked by the pressure of big corporations, banks and owners for profit maximization. A run on the most favorable locations has begun in a time of opening and networking, of instantaneous worldwide date exchange and "unparalleled mobility of capital." Production is transferred to countries where the taxes are trifling. This has a positive effect on the expected profit spans. In these places, environment protection and human rights are obviously marginalized. [11] According to Altvater, we are confronted with "a process of overcoming the historical limits" that exceeds the resources of this world, an abandonment of moral rules and institutionalized bonds. [12]


The absorption of capital prompts the demands for social dismantling and lowering wages "that businesses cannot evade in serving the public interest." Obviously, thousands of employees must be "released" or dismissed for the well-being of everyone. [13]


What are the consequences? Increasing unemployment, indebtedness of local communities, decline of purchasing power and dwindling investment funds result. The late consequences of this "globalization of poverty" will presumably first become visible in several decades. [14]


Unemployment as a Trend


"The value of humans as the most important production factor will diminish like the value of horses in agriculture that ultimately were made completely superfluous by the tractor." [15] Wassily Leontief, Nobel Prize winner for economics


The rise of unemployment worldwide has reached unparalleled dimensions. In 1999, 700 million persons were affected and poverty did not stop with professionals. The supply of work was so meager that a stable employment of everyone could only be secured by introducing a 22-hour week or lowering the initial pension age to 38.years of age. Unemployment is a fact that must be faced in times of mass terminations and rapid technical progress, automation, and worldwide networking. [16]


We do not have a shortage of jobs but a "shortage of profitable work" [17] because there is no one who pays for work. [18]


The new definition of responsibility in Hartz IV plays into the hands of businesses with the worldwide downward spiral in wages and quality of work. [19] This increases pressure on the unemployed who must apply for nearly any job to maintain their claim to support. Personal Service Agencies (PSA) [20], mini- and one-euro jobs [21] and all the forms of modern slavery are included here. This foments anxiety and annoyance and drives processes of impoverishment and division. Whoever had wages and bread in the past is far from solidarity with those upended by social dismantling. The power elite decries the impacted as shirkers, lack of flexibility, lack of motivation and weakness of character.


Although the causes for unemployment can hardly be sought with the individual, that is the picture circulated by media and politicians. [22] This social exile, the "unwilling," hand-in-hand with the threat of scarce jobs and lower wages increases the pressure of competition and adaptation of those still employed. The average income is reduced again; purchasing power falls and drives the downward spiral. – All this occurs amid the rising net profits of mammoth businesses that do not tire emphasizing through skillful arguments the necessity of social dismantling. [23]


The job shortage is answered with retraining. However, "training people for a job when there are no jobs is like sprucing up a corpse" that ultimately remains a corpse." [24] This phenomenon will allegedly simply disappear with the creation of economic programs. The placement of highly trained workers for free at the expense of taxpayers and in favor of industry will not change anything in the initial situation.


NOTES


[1] Daly 1986, S. 1
[2] http://www.stura.tu-chemnitz.de/fibel/fibel2001.pdf, S. 66
[3] Daly 1986, S.62
[4] Vgl. Weber aus Klöck 1998, S.13
[5] Vgl. Elsen 1998, S. 75
[6] Vgl. Klöck 1998, S.15
[7] Vgl. Klöck 1998, S.15
[8] Litaer 1999, S.282
[9] ebenda, S.134f
[10] Vgl. Marx/Engels Das Kommunistische Manifest 1848
[11] Vgl. Microsoft Encarta Enzyklopädie 2003
[12] Vgl. Messner 1999, S.74
[13] http://www.dr-rath-foundation.org/deutsch/substainabledevelopment/equalityofopportunity.html
[14] Vgl. Microsoft Encarta Enzyklopädie 2003
[15] http://www.futuremoney.de/doc/gp.doc
[16] Vgl. Litaer, S.29 und Forrester 1998
[17] Vgl. Elsen 1998, S.39
[18] Vgl. Litaer 1999, S.233f
[19] Vgl. Litaer 1999, S. 28
[20] Zeitarbeitsfirmen, die den „Verleih von Arbeitslosen" etablieren
[21] Tatsächlich beträgt der Stundenlohn bei einem 1-Euro-Job ganze zwei Euro; Bereits bei Erlangung von 15 Wochenarbeitsstunden zu zwei Euro wird die Person aus der Arbeitslosenstatistik getilgt
[22] Sahle 2001, S.44
[23] Vgl. Elsen, 1998, S.40
[24] Vgl. Elsen 1998, S. 38


UNEMPLOYMENT AND INEQUALITY: TWO URGENT PROBLEMS OF THE RICH WORLD


By http://www.oekom.de


[This reading sample of the 2017 book from oekom verlag publisher Munich is translated from the German on the Internet.]


Continuous unemployment and growing inequality are two of the most pressing problems facing the modern rich world.


Since the beginning of the 1980s, the chasm between poor and rich has been growing in the rich world. This development is a puzzle given the generally strong economic growth in the last 30 years. One day economic growth should help reduce inequality. Through the so-called trickle-down effect, the spending of the rich should seep into the pockets of the poor through an economic filtration plant. The population altogether would be strengthened and everyone’s living standard would rise.


Millions of people in the rich world still live nowadays under conditions similar to Victorian England. In the United States, 49 million people – in a total population of 320 million – are considered poor. In Europe, every seventh person is stricken by poverty. In Eastern Europe, Spain and Greece, it is every fifth – above all women, single parents and children. A quarter of the population in the developed rich world is currently “threatened by poverty or social exclusion” when people with very low incomes are added. These are 200 million people. While the chasm between poor and rich grows, the unemployment in the whole rich world is also increasing and stubbornly persists at a high level. Those under 25 are the most imperiled but millions of baby boomers are without incomes, pensions or job-chances. The number of under-employed who cannot find full-time posts though they would like to work more has also increased considerably.


That is a contradiction in an epoch of unparalleled global prosperity and after many decades of wholesome economic growth. For decades, economists explained the opposite should be expected. Time and again they tell us economic growth brings jobs, higher incomes and a higher standard of living. But it did not.


What is wrong in the world?


The international development organization Oxfam gives a simple explanation. There was a “power takeover” by the rich. Oxfam decries the fattest moneybags for manipulating the political system, introducing unfair rules of the game to their favor to pay fewer taxes, observe fewer regulations and hardly fear controls any more. The consequence is that wealth and income – unlike what is generally assumed – have shifted from bottom to the top. Thus the development is running in the wrong direction.


This must change if life should improve. Otherwise the rich will become ever richer since today’s economic system is designed that way. The defenders of the free market economy like to argue they are promoting an egalitarian society. In reality, as we will show, it has produced a society that is like a giant casino in which the outcomes are manipulated in favor of the rich.


In his epoch-making book “Capital in the 21st Century,” the French economist Thomas Piketty predicted a large part of the developed world will fall back into conditions like the 19th century, a time when factor owners, entrepreneurs and bankers controlled the bulk of the wealth while everyone else struggled to survive. He sees a world coming in which the middle class in the rich countries practically disappears.


This raises a fundamental and alarming question. Were the few decades after the Second World War when the distance between poor and rich was greatly reduced an anomaly because of special circumstances? Can the past order that predominated in the history of humanity be a natural order of things, that a tiny minority controlled nearly all the world while the great majority was extremely poor?


This question is not easy to answer. In the past 70 years, a rich world dominated by the middle class seemed decreed by nature and right. However, historically, that was an exception. At no other time within the last 2000 years was there a middle class of that scale.


“The past will devour the future” if there is no radical change of direction in economic development. That is Piety’s prediction. The few decades in the second half of the 20th century in which the middle class led a rather contented life will enter the history books as an interesting but temporary social phenomenon.


Piketty sees the solution in a global capital tax or wealth tax. The cooperation between the tax authorities of countries must improve so they can exchange data about income and wealth. He also urged a more just tax system that enables governments to invest in the infrastructure and education. In Piketty’s perspective, wealth should be redistributed through taxation and more social justice created.


These proposals are hard to realize. The politicians of the rich world must do the exact opposite of what they have done in the last 30 years. They must tax their biggest financial backers and their most powerful citizens


Other economists urge investing more in the infrastructure to create jobs and redistribute prosperity: to generalize the right to intellectual property and give more people the chance of using new technologies and ideas. The educational system should be reformed so more young persons can establish businesses.


None of these solutions touches the essential problem. Persons are obviously freed from unemployment and can make an income by building new streets and tunnels or founding businesses. But nothing fundamental is changed in a system where wealth gradually flows from the majority of the population to the richest. (All personal and corporate success depends on state investment in education, roads, health care, water quality, food safety, airwaves and community centers. Translator’s note)


Such political measures go beyond a temporary improvement. They help the poor earn more and aid the unemployed in finding some kind of work. Long-term changes will not be realized this way.


We believe the solution must be much more radical. To overcome their situations, the countries of the rich world must change their economic system little by little with skilful methods that remedy the problems. They must free themselves from the ideology that preaches individual freedom, free markets and free trade and plays down the influence of the state. Instead they should organize the society and economic system so both serve the well-being of broad sectors of the population. Markets and trade must be actively controlled and cannot remain unregulated. Moreover governments should have “the right size” – that is, they should be small enough to work efficiently but big enough to fulfill the tasks and master the challenges facing them.


Another problem arises. To function, the current economics system needs a resource throughput – resource consumption – that continuously grows. This is designed in the DNA of the system. People must consume more and more to prevent higher unemployment and assure the survival of the system.


However the quantity of emitted greenhouse gases increases and changes the climate of our planet. Climate change has already advanced so far that global weather patters will worsen in the coming decades and the sea level will rise regardless of what is done against this.


Every attempt to steer the economic growth and slow down the damage of the environment throttles the fuel influx that keeps the economic motor going. A cooling economy leads to higher unemployment and thus more inequality and poverty.


Thus the present economic system has forced the developed world into a treadmill turning ever faster and driven society socially and ecologically in a direction that allows little hope. Every conventional attempt to delay the course of things only makes the situation worse. In other words, conventional solutions cannot do anything against inequality, unemployment or climate change. This is also true for a tax on the rich, increasing infrastructure spending or incentives for young entrepreneurs.


We need unconventional solutions that are attractive for the majority of the population so they help carry out the necessary changes.


The proposals in this book offer such solutions. Their realization would increase the well-being of everyone and reduce unemployment and inequality. Thus they offer immediate advantages, benefits and chances for the majority. Diminishing the consequences of climate change is by no means unimportant or irrelevant for us – even if it may only be a side-effect for many. The proposals are the reason we wrote this book.


THE LIMITS OF GROWTH


By Ulrich Thielemann


[This article published 11/24/2010 is translated from the German on the Internet. Since 2011, the economic ethicist Ulrich Thielemann has been the director of MeM, a think tank for economic ethics in Berlin.]


Courting capital should have ended at least after the Lehman bankruptcy. But the world financial architecture is largely the same today. The real economy has reached the limits of growth and we must endure a zero-sum game between fraudsters.


After the Lehman bankruptcy, many thought the end of market fundamentalism or market radicalism had begun. Market fundamentalism insisted “courting” (Hans-Werner Sinn) capital in its insatiable desire of profit serves the well-being of everyone. Nicolas Sarkozy declared after the fireworks of deregulation of the capital markets: “Laissez-faire is over.” Angela Merkel wanted and wants to restore “the primacy of politics over the financial markets” on the plane of a global world economic order since a “human market economy” is only possible this way. She is right.


For a long while, there was hardly a trace of a “new world financial architecture.” This is because the crisis remains misunderstood – as though only a few bankers had “speculated” in the nirvana of their models. The crisis is the culmination point of the seizure of the real economy, society, and politics by the “power of capital.”


THE REAL ECONOMY HITS THE LIMITS OF GROWTH


From 1980 to 2008, the global economic output increased six-fold. Nominal finance capital rose by a factor of 15 in the same time period. Who amassed these profits? An increasingly exhausted real economy up against the limits of growth is not capable of that – despite all the effects of whipping and lashing that capital used by playing off the “locations” against each other.


Instead of deflating capital and canceling the gigantic skimming off the cream mocking all performance justice, politics fed the bubble with trillions of securities. We will all now be servants of capital entirely involuntary and without bonuses.


Therefore the calculation of the actors of bubble capitalism does not work. “Captivity as a hostage” is the magic word or somewhat more elegantly “domino effects.” Memories of 1929 should be kept alive. Peter Steinbruck told us he looked into an “abyss.” As he reveals in his latest book, he passed on the opinions of the bankers whom he consulted as experts. Later German chancellor Merkel said “unselfish advisors” were hard to find.


A ZERO-SUM GAME BETWEEN FRAUDSTERS


Germany promised securities of 142 billion euros, 6% of the GDP or 47% of a federal budget, to the shareholders and creditors of Hypo Real Estate. Given this scale, it must be astonishing why no one asked whether half would have sufficed. Capital market fundamentalism believes profits can be gained painlessly.


As in the past, the bubble game – really a zero-sum game between fraudsters – is based on the generation of non-transparency. The captivity as hostages of capital will not end without clarifying the role actually played by capital and the role it should play for the well-being of everyone. Then a day could dawn when sentences like Josef Ackermann’s axiom “every regulation (of banks) aggravates investments, costs money and endangers jobs” will be seen as hiding particular interests and posing them as the public interest. (Josef Ackermann was CEO of Deutsche Bank for many years and insisted 25% increase in profits was normal)