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Crisis management through the ages
The capitalist world system thus runs on credit, on the anticipation of future valorization that is continually postponed into the future through the granting of credit. Credit generates the demand that keeps capitalist commodity production, which is suffocating under its own productivity, going at all.
Crisis management through the ages
by Tomasz Konicz
[This article posted on 10/1/2024 is translated from the German on the Internet, http://www.exit-online.org.]
First published on oekumenisches-netz.de
The end of neoliberal globalization is giving rise to neo-fascist crisis management – especially in the former “world export champion.”
It would be wrong to postulate a one-sided causal inevitability between the development of the economic base and the political-ideological superstructure in the bad old Marxist tradition.
Economic development, the unfolding of the internal contradictions of capital, does not unilaterally determine the political system. There are clearly interactions here, as well as various options open to the capitalist functional elites in responding to the consequences of the crisis. Here—and this is crucial—the further course of the crisis can indeed be influenced by politics, even if it is of course not in a position to overcome the systemic crisis within capitalism itself. Much of what politicians discuss in response to crisis surges in terms of emergency measures can be implemented by governments or regimes of widely differing political orientations. This is particularly evident in the severe crisis phase of the 1930s, when protectionism, work programs, and statism were pursued by countries as diverse as Roosevelt's United States and Nazi Germany.
Nevertheless, in its new phase, which began at the latest with the pandemic and the surge in inflation, the crisis makes a fascist option at least viable, especially in countries with corresponding “traditions.” The fundamental upheaval in the crisis process and its resolution of contradictions was initiated by the pandemic-induced crisis surge. The war in Ukraine is in fact a reaction to this new phase of the crisis, which is bringing neoliberal globalization to an end—and which is characterized by stagflation, deglobalization, protectionism, active industrial policy, nearshoring, and vertical integration.
The four decades of neoliberalism – from the 1980s to around 2020 – were in fact a crisis response that prolonged the internal contradiction of capital. This fundamental contradiction of the capitalist mode of production unfolds as follows: productive wage labor forms the substance of capital, but at the same time, the process of capital valorization strives to displace wage labor from the production process through competition-driven rationalization measures.
Marx introduced the ingenious term “processual contradiction” for this self-destructive process. This contradiction of capitalist commodity production, in which capital minimizes its own substance through competition-driven rationalization drives, can only be maintained in “process,” in the continuous expansion and further development of new fields of valorization of commodity production. The same scientific and technological progress that led to the decline of wage labor in established industries also gave rise to new industries and manufacturing methods.
This resulted in industrial structural change—the ability of capital to constantly “reinvent” itself—of which bourgeois capitalism apologists are so proud. Since the beginning of industrialization in the 18th century, the capitalist economy has been characterized by structural change, with the textile industry, heavy industry, the chemical industry, the electrical industry, and most recently Fordist vehicle manufacturing serving as leading sectors that exploited wage labor on a massive scale. With the advent of automation and the IT revolution, industrial structural change failed from the 1970s and 1980s onwards. These new technologies created far fewer jobs than were rationalized away by their macroeconomic application. The productive forces thus break “the fetters of the relations of production” (Marx), and capital reaches an “internal barrier” (Robert Kurz) to its capacity for development.
The “rescue” of capitalism through neoliberalism
The reaching of its internal barrier by capital as a processual contradiction manifested itself quite concretely in the crisis period of stagflation that followed the postwar boom, as no new leading industrial sector with mass exploitation of wage labor could be developed. The late 1970s and early 1980s were characterized by anemic economic growth, frequent recessions, rapidly swelling mass unemployment, and inflation rates that sometimes reached double digits. This stagflation of the 1970s—a portmanteau word formed from the words stagnation and inflation—was, from a historical perspective, the crisis period that paved the way for neoliberalism, as Keynesian crisis strategies failed.
In addition to the destruction or disempowerment of the labor movement (Great Britain, USA), which led to long-term wage stagnation in the USA, neoliberalism responded to the crisis by “de-securing” capitalism, with a rush forward in which the markets – especially the financial sector – were deregulated. In order not to collapse under its own internal contradictions, capitalism effectively abandoned the ground of labor exploitation during the neoliberal turn of the 1980s and moved into the lofty heights of a financial market-dominated economic structure. The system responded to the failure of industrial structural change by establishing the financial system as the “leading sector.”
Capital utilization was thus increasingly simulated on the financial markets under neoliberalism. Since real capital utilization cannot be permanently pursued within the financial sphere, growth in the four neoliberal decades was ultimately fueled by a historically unique boom in the most important commodity the financial sector has to offer: credit. The capitalist world system thus runs on credit, on the anticipation of future valorization that is continually postponed into the future through the granting of credit. Credit generates the demand that keeps capitalist commodity production, which is suffocating under its own productivity, going at all. This can be seen very clearly in global debt, which rose much faster than global economic output in the neoliberal era: from around 120 percent in the 1970s to 238 percent in 2022.1
The central mechanism that transformed the increasing debt generated by the financial markets into real economic growth was the speculative bubble. Since the 1980s, the system has thus increasingly been running on the “hot” air of ever-rising and alternating speculative bubbles: from the dot-com bubble at the turn of the millennium, when the emerging internet led to wild 2000, to the real estate bubble in Europe and the US, to the large liquidity bubble maintained by central banks, which was only brought to an end by inflation in 2020. As soon as a bubble burst, there was a threat of a crash, which was prevented by the emergence of a new speculative bonanza. One could speak here of a veritable bubble transfer, in which all the fiscal and monetary policy measures used to combat the consequences of a burst speculative dynamic contribute to creating the foundations for a new bubble. Ultimately, capitalist fiscal policy can only extinguish the fire of speculation with gasoline.
The end of neoliberalism
However, this was not a linear process, but a dynamic one. The costs and expenses of stabilizing the global financial system rose steadily with each bursting bubble, until the inflationary phase of monetary policy beyond the US, with its global reserve currency, left no choice but to abandon the expansionary monetary policy that had been the basis of the financial market boom. Capitalist crisis policy has ridden its financial market-driven, neoliberal horse to death, on which it tried to flee the internal barrier of capital for over four decades. The neoliberal postponement seems to be coming to an end, and stagflation, forgotten for decades, is returning on a much higher scale. The most important difference between today's wave of inflation and the historical phase of stagflation is that a period of high interest rates, as initiated by Fed Chairman Volcker in 1979, no longer offers a way out given the unstable financial sphere.
With the end of the global deficit economy, the global deficit cycles that effectively formed the basis of neoliberal globalization were also damaged. Not all economies incurred the same level of debt during the neoliberal era; export-oriented locations were able to export their production surpluses to deficit countries as part of these cycles. The largest of these, namely the Pacific deficit cycle between the United States and China, was characterized by the People's Republic, which was emerging as the world's workshop, exporting huge quantities of goods across the Pacific to the deindustrializing United States, thus generating enormous trade surpluses, while in the opposite direction, a financial market flow of US bonds flowed, so that China rose to become Washington's largest foreign creditor for a time. A similar, smaller deficit cycle developed between Germany and the southern periphery of the eurozone in the period from the introduction of the euro to the euro crisis.
Globalization was thus not only characterized by the establishment of global supply chains, it also consisted of a corresponding globalization of debt dynamics realized through deficit cycles, which, as mentioned, grew faster than global economic output in recent decades – and consequently acted as an important economic driver by generating credit-financed demand. The globalization that produced these gigantic global imbalances was a systemic reaction, a leap forward to escape the increasing internal contradictions of the capitalist mode of production, which is suffocating under its own productivity development.
The return of protectionism
What is now unfolding globally could be studied in its early stages in the euro crisis: as long as debt mountains grow and financial market bubbles are on the rise, all participating countries seem to benefit from this growth on credit. But as soon as the bubbles burst, the battle begins over who will bear the costs of the crisis. In Europe, Berlin famously used the crisis to shift the costs of the crisis onto southern Europe in the form of Schäuble's notorious austerity measures. Now, on a global level, the much larger debt-financed deficit economy, which has recently been kept alive primarily by the expansionary monetary policy of the central banks, is on the verge of collapse. The rise of nationalism and neo-fascism, the acute danger of world war: these are expressions of this very crisis process. Thus, an analogy can certainly be drawn with the pre-fascism of the 1930s, when the fallout from the global economic crisis that broke out in 1929 was exacerbated by rapidly rising protectionism.
Which brings us to Germany's misery. With the erosion of globalization, the long-term economic strategy of strict export orientation pursued by the Federal Republic since the introduction of the euro, whose economic “business model” was based on achieving the highest possible trade surpluses within the framework of the aforementioned deficit cycles, is also failing. This so-called beggar-thy-neighbor policy exports debt, deindustrialization, and unemployment to the target countries of the export surpluses. After Berlin had ruined the European crisis states with draconian austerity policies, this export strategy turned to countries outside Europe—such as the US.2
However, this export-focused strategy is increasingly coming into conflict with protectionist tendencies in Washington, where the Biden administration is effectively continuing Trump's economic nationalism aimed at reindustrialization. Washington—precisely because of increasing domestic political instability—is no longer willing to continue to accept the high trade deficits that stabilized the hyperproductive world system during neoliberal globalization—and which were made possible by the dollar as the world's reserve currency. In mid-2023, the Financial Times described this change in Washington's economic policy strategy, which was initiated by the Trump administration and further pursued by Biden. At its core, it is a protectionist departure from globalization. Through a “foreign policy for the middle class,” the White House wanted to counteract the “erosion of the industrial base,” the emergence of “geopolitical rivals,” and the increasing “inequality” that threatens democracy.3
A visible expression of the full-blown deglobalization is so-called nearshoring, in which the US is seeking to replace its economic dependence on the Chinese export industry by building up industrial capacity in Mexico. In addition, German automotive suppliers continue to face exclusion from US production chains due to provisions in the US subsidy program “Inflation Reduction Act.” Substantial concessions from Washington are also unlikely, as protectionism appears to be working. German companies in particular are investing more heavily in the US in order to benefit from Washington's subsidies. In effect, an economic decoupling is taking place between the US and the EU, with Washington pulling ahead economically while Europeans in particular bear the brunt of the crisis.
Danger of “authoritarian revolt”
Berlin thus spent the 21st century aligning the Federal Republic—and, from 2010 onwards, in the wake of the euro crisis, the eurozone—with an export-focused economic model aimed at achieving trade surpluses in the globalized world economy of the neoliberal era. With the onset of deglobalization, the former world champion of export surpluses finds itself in an economic policy impasse that in the medium term calls into question not only the political stability of the Federal Republic, but also the political survival of the eurozone. And it is precisely this return to protectionism that is giving the New Right additional momentum. The strong export economy acted as a kind of civilizational safety mechanism in Germany, with its terrible authoritarian-fascist tradition, as it provided a solid economic argument against nationalism. Germany was, after all, a “winner of globalization.”
But it is precisely the German export industry that is currently in a downturn, which is actually only the beginning of the end of the export-focused German economic model. The sharp decline in exports in 2023 has contributed significantly to the poor economic development in the Federal Republic, with little improvement expected in the coming years. But this also means that the fat years made possible by export surpluses are inevitably coming to an end for the Federal Republic. The political weight of the German export industry will thus decline at a time when, for the first time in a long time, Germany will also enter a prolonged crisis phase, from which the New Right once again threatens to profit.
Yet it was precisely the officials of large-scale and export industries who repeatedly took a stand against the New Right. The AfD (anti-immigrant Alliance for Germany) and the dull Nazis were seen as an image problem that damaged the “Made in Germany” brand in its global success story. The BDI (Federation of German Industries) and top managers such as Siemens CEO Joe Kaeser were able to invoke actual economic interests in their arguments against the right. The faction of capital that most strongly opposes AfD participation in government is therefore German large-scale and export industries, which are currently losing influence due to the crisis. The reactionary vanguard within the functional elites, which made a pact with the AfD and the cross-front very early on, is made up of small business owners and medium-sized companies, as can be seen, for example, in the connections between the Association of Family Entrepreneurs and the AfD. Capitalists focused on the domestic market (Müller Milch) also seem more inclined to consider right-wing extremist options.
The AfD is already the second strongest force at the federal level. Just how thin the civilizational ice in the Federal Republic has become is evident from the fact that the rise of the AfD took place during a period of relative economic prosperity; it was fueled by German fears of crisis, not by an actual outbreak of crisis, such as that experienced by Southern Europe during the euro crisis. Since the refugee crisis, the entire bourgeois-liberal anti-fascism movement, which was largely in line with the arguments of the export economy, has emphasized the economic “usefulness” of globalization, open borders for the movement of goods, and immigration: refugees are economically useful due to the aging population of the Federal Republic, and the exporting country must remain attractive to skilled workers, at least according to the common arguments. But these narratives cultivated in the liberal mainstream will disappear as soon as stagnation and recession take hold in Germany, while exports continue to decline, giving further impetus to “German fear,” which so readily turns into hatred of the socially disadvantaged.
The crux of the matter is that this authoritarian revolt will never come to power unless a substantial portion of the functional elites opt for this fascist option. And there are signs of an open split within the German functional elites regarding the participation of a party drifting toward the extreme right in the government. This is the decisive breakthrough: Will entire factions follow the previous AfD sympathizers such as Mr. Müller from Müllermilch or the Mövenpick billionaire Baron August von Finck? In the middle class? Among family entrepreneurs?
In times of crisis, fascist movements only come to power when the upheavals and disruptions have reached such proportions that the functional elites perceive these movements as the “lesser evil.” To put it vividly: only when capital managers have gotten so deeply bogged down in the crisis that they are up to their necks in water do they hold their noses and reach out to the extreme right. And then there is no stopping them, as the fascist authoritarian revolt, which always craves the approval of the authorities, is further fueled by this (which, incidentally, also renders the left's intention to shake up the followers of the powerful fascist masterminds by unmasking them ineffective. Authoritarian characters are not deterred by the camaraderie between AfD officials and billionaires, but rather attracted to it).
Footnotes
1 https://www.imf.org/en/Blogs/Articles/2023/09/13/global-debt-is-returning-to-its-rising-trend
2 https://www.census.gov/foreign-trade/balance/c0003.html
3 https://www.ft.com/content/77faa249-0f88-4700-95d2-ecd7e9e745f9
by Tomasz Konicz
[This article posted on 10/1/2024 is translated from the German on the Internet, http://www.exit-online.org.]
First published on oekumenisches-netz.de
The end of neoliberal globalization is giving rise to neo-fascist crisis management – especially in the former “world export champion.”
It would be wrong to postulate a one-sided causal inevitability between the development of the economic base and the political-ideological superstructure in the bad old Marxist tradition.
Economic development, the unfolding of the internal contradictions of capital, does not unilaterally determine the political system. There are clearly interactions here, as well as various options open to the capitalist functional elites in responding to the consequences of the crisis. Here—and this is crucial—the further course of the crisis can indeed be influenced by politics, even if it is of course not in a position to overcome the systemic crisis within capitalism itself. Much of what politicians discuss in response to crisis surges in terms of emergency measures can be implemented by governments or regimes of widely differing political orientations. This is particularly evident in the severe crisis phase of the 1930s, when protectionism, work programs, and statism were pursued by countries as diverse as Roosevelt's United States and Nazi Germany.
Nevertheless, in its new phase, which began at the latest with the pandemic and the surge in inflation, the crisis makes a fascist option at least viable, especially in countries with corresponding “traditions.” The fundamental upheaval in the crisis process and its resolution of contradictions was initiated by the pandemic-induced crisis surge. The war in Ukraine is in fact a reaction to this new phase of the crisis, which is bringing neoliberal globalization to an end—and which is characterized by stagflation, deglobalization, protectionism, active industrial policy, nearshoring, and vertical integration.
The four decades of neoliberalism – from the 1980s to around 2020 – were in fact a crisis response that prolonged the internal contradiction of capital. This fundamental contradiction of the capitalist mode of production unfolds as follows: productive wage labor forms the substance of capital, but at the same time, the process of capital valorization strives to displace wage labor from the production process through competition-driven rationalization measures.
Marx introduced the ingenious term “processual contradiction” for this self-destructive process. This contradiction of capitalist commodity production, in which capital minimizes its own substance through competition-driven rationalization drives, can only be maintained in “process,” in the continuous expansion and further development of new fields of valorization of commodity production. The same scientific and technological progress that led to the decline of wage labor in established industries also gave rise to new industries and manufacturing methods.
This resulted in industrial structural change—the ability of capital to constantly “reinvent” itself—of which bourgeois capitalism apologists are so proud. Since the beginning of industrialization in the 18th century, the capitalist economy has been characterized by structural change, with the textile industry, heavy industry, the chemical industry, the electrical industry, and most recently Fordist vehicle manufacturing serving as leading sectors that exploited wage labor on a massive scale. With the advent of automation and the IT revolution, industrial structural change failed from the 1970s and 1980s onwards. These new technologies created far fewer jobs than were rationalized away by their macroeconomic application. The productive forces thus break “the fetters of the relations of production” (Marx), and capital reaches an “internal barrier” (Robert Kurz) to its capacity for development.
The “rescue” of capitalism through neoliberalism
The reaching of its internal barrier by capital as a processual contradiction manifested itself quite concretely in the crisis period of stagflation that followed the postwar boom, as no new leading industrial sector with mass exploitation of wage labor could be developed. The late 1970s and early 1980s were characterized by anemic economic growth, frequent recessions, rapidly swelling mass unemployment, and inflation rates that sometimes reached double digits. This stagflation of the 1970s—a portmanteau word formed from the words stagnation and inflation—was, from a historical perspective, the crisis period that paved the way for neoliberalism, as Keynesian crisis strategies failed.
In addition to the destruction or disempowerment of the labor movement (Great Britain, USA), which led to long-term wage stagnation in the USA, neoliberalism responded to the crisis by “de-securing” capitalism, with a rush forward in which the markets – especially the financial sector – were deregulated. In order not to collapse under its own internal contradictions, capitalism effectively abandoned the ground of labor exploitation during the neoliberal turn of the 1980s and moved into the lofty heights of a financial market-dominated economic structure. The system responded to the failure of industrial structural change by establishing the financial system as the “leading sector.”
Capital utilization was thus increasingly simulated on the financial markets under neoliberalism. Since real capital utilization cannot be permanently pursued within the financial sphere, growth in the four neoliberal decades was ultimately fueled by a historically unique boom in the most important commodity the financial sector has to offer: credit. The capitalist world system thus runs on credit, on the anticipation of future valorization that is continually postponed into the future through the granting of credit. Credit generates the demand that keeps capitalist commodity production, which is suffocating under its own productivity, going at all. This can be seen very clearly in global debt, which rose much faster than global economic output in the neoliberal era: from around 120 percent in the 1970s to 238 percent in 2022.1
The central mechanism that transformed the increasing debt generated by the financial markets into real economic growth was the speculative bubble. Since the 1980s, the system has thus increasingly been running on the “hot” air of ever-rising and alternating speculative bubbles: from the dot-com bubble at the turn of the millennium, when the emerging internet led to wild 2000, to the real estate bubble in Europe and the US, to the large liquidity bubble maintained by central banks, which was only brought to an end by inflation in 2020. As soon as a bubble burst, there was a threat of a crash, which was prevented by the emergence of a new speculative bonanza. One could speak here of a veritable bubble transfer, in which all the fiscal and monetary policy measures used to combat the consequences of a burst speculative dynamic contribute to creating the foundations for a new bubble. Ultimately, capitalist fiscal policy can only extinguish the fire of speculation with gasoline.
The end of neoliberalism
However, this was not a linear process, but a dynamic one. The costs and expenses of stabilizing the global financial system rose steadily with each bursting bubble, until the inflationary phase of monetary policy beyond the US, with its global reserve currency, left no choice but to abandon the expansionary monetary policy that had been the basis of the financial market boom. Capitalist crisis policy has ridden its financial market-driven, neoliberal horse to death, on which it tried to flee the internal barrier of capital for over four decades. The neoliberal postponement seems to be coming to an end, and stagflation, forgotten for decades, is returning on a much higher scale. The most important difference between today's wave of inflation and the historical phase of stagflation is that a period of high interest rates, as initiated by Fed Chairman Volcker in 1979, no longer offers a way out given the unstable financial sphere.
With the end of the global deficit economy, the global deficit cycles that effectively formed the basis of neoliberal globalization were also damaged. Not all economies incurred the same level of debt during the neoliberal era; export-oriented locations were able to export their production surpluses to deficit countries as part of these cycles. The largest of these, namely the Pacific deficit cycle between the United States and China, was characterized by the People's Republic, which was emerging as the world's workshop, exporting huge quantities of goods across the Pacific to the deindustrializing United States, thus generating enormous trade surpluses, while in the opposite direction, a financial market flow of US bonds flowed, so that China rose to become Washington's largest foreign creditor for a time. A similar, smaller deficit cycle developed between Germany and the southern periphery of the eurozone in the period from the introduction of the euro to the euro crisis.
Globalization was thus not only characterized by the establishment of global supply chains, it also consisted of a corresponding globalization of debt dynamics realized through deficit cycles, which, as mentioned, grew faster than global economic output in recent decades – and consequently acted as an important economic driver by generating credit-financed demand. The globalization that produced these gigantic global imbalances was a systemic reaction, a leap forward to escape the increasing internal contradictions of the capitalist mode of production, which is suffocating under its own productivity development.
The return of protectionism
What is now unfolding globally could be studied in its early stages in the euro crisis: as long as debt mountains grow and financial market bubbles are on the rise, all participating countries seem to benefit from this growth on credit. But as soon as the bubbles burst, the battle begins over who will bear the costs of the crisis. In Europe, Berlin famously used the crisis to shift the costs of the crisis onto southern Europe in the form of Schäuble's notorious austerity measures. Now, on a global level, the much larger debt-financed deficit economy, which has recently been kept alive primarily by the expansionary monetary policy of the central banks, is on the verge of collapse. The rise of nationalism and neo-fascism, the acute danger of world war: these are expressions of this very crisis process. Thus, an analogy can certainly be drawn with the pre-fascism of the 1930s, when the fallout from the global economic crisis that broke out in 1929 was exacerbated by rapidly rising protectionism.
Which brings us to Germany's misery. With the erosion of globalization, the long-term economic strategy of strict export orientation pursued by the Federal Republic since the introduction of the euro, whose economic “business model” was based on achieving the highest possible trade surpluses within the framework of the aforementioned deficit cycles, is also failing. This so-called beggar-thy-neighbor policy exports debt, deindustrialization, and unemployment to the target countries of the export surpluses. After Berlin had ruined the European crisis states with draconian austerity policies, this export strategy turned to countries outside Europe—such as the US.2
However, this export-focused strategy is increasingly coming into conflict with protectionist tendencies in Washington, where the Biden administration is effectively continuing Trump's economic nationalism aimed at reindustrialization. Washington—precisely because of increasing domestic political instability—is no longer willing to continue to accept the high trade deficits that stabilized the hyperproductive world system during neoliberal globalization—and which were made possible by the dollar as the world's reserve currency. In mid-2023, the Financial Times described this change in Washington's economic policy strategy, which was initiated by the Trump administration and further pursued by Biden. At its core, it is a protectionist departure from globalization. Through a “foreign policy for the middle class,” the White House wanted to counteract the “erosion of the industrial base,” the emergence of “geopolitical rivals,” and the increasing “inequality” that threatens democracy.3
A visible expression of the full-blown deglobalization is so-called nearshoring, in which the US is seeking to replace its economic dependence on the Chinese export industry by building up industrial capacity in Mexico. In addition, German automotive suppliers continue to face exclusion from US production chains due to provisions in the US subsidy program “Inflation Reduction Act.” Substantial concessions from Washington are also unlikely, as protectionism appears to be working. German companies in particular are investing more heavily in the US in order to benefit from Washington's subsidies. In effect, an economic decoupling is taking place between the US and the EU, with Washington pulling ahead economically while Europeans in particular bear the brunt of the crisis.
Danger of “authoritarian revolt”
Berlin thus spent the 21st century aligning the Federal Republic—and, from 2010 onwards, in the wake of the euro crisis, the eurozone—with an export-focused economic model aimed at achieving trade surpluses in the globalized world economy of the neoliberal era. With the onset of deglobalization, the former world champion of export surpluses finds itself in an economic policy impasse that in the medium term calls into question not only the political stability of the Federal Republic, but also the political survival of the eurozone. And it is precisely this return to protectionism that is giving the New Right additional momentum. The strong export economy acted as a kind of civilizational safety mechanism in Germany, with its terrible authoritarian-fascist tradition, as it provided a solid economic argument against nationalism. Germany was, after all, a “winner of globalization.”
But it is precisely the German export industry that is currently in a downturn, which is actually only the beginning of the end of the export-focused German economic model. The sharp decline in exports in 2023 has contributed significantly to the poor economic development in the Federal Republic, with little improvement expected in the coming years. But this also means that the fat years made possible by export surpluses are inevitably coming to an end for the Federal Republic. The political weight of the German export industry will thus decline at a time when, for the first time in a long time, Germany will also enter a prolonged crisis phase, from which the New Right once again threatens to profit.
Yet it was precisely the officials of large-scale and export industries who repeatedly took a stand against the New Right. The AfD (anti-immigrant Alliance for Germany) and the dull Nazis were seen as an image problem that damaged the “Made in Germany” brand in its global success story. The BDI (Federation of German Industries) and top managers such as Siemens CEO Joe Kaeser were able to invoke actual economic interests in their arguments against the right. The faction of capital that most strongly opposes AfD participation in government is therefore German large-scale and export industries, which are currently losing influence due to the crisis. The reactionary vanguard within the functional elites, which made a pact with the AfD and the cross-front very early on, is made up of small business owners and medium-sized companies, as can be seen, for example, in the connections between the Association of Family Entrepreneurs and the AfD. Capitalists focused on the domestic market (Müller Milch) also seem more inclined to consider right-wing extremist options.
The AfD is already the second strongest force at the federal level. Just how thin the civilizational ice in the Federal Republic has become is evident from the fact that the rise of the AfD took place during a period of relative economic prosperity; it was fueled by German fears of crisis, not by an actual outbreak of crisis, such as that experienced by Southern Europe during the euro crisis. Since the refugee crisis, the entire bourgeois-liberal anti-fascism movement, which was largely in line with the arguments of the export economy, has emphasized the economic “usefulness” of globalization, open borders for the movement of goods, and immigration: refugees are economically useful due to the aging population of the Federal Republic, and the exporting country must remain attractive to skilled workers, at least according to the common arguments. But these narratives cultivated in the liberal mainstream will disappear as soon as stagnation and recession take hold in Germany, while exports continue to decline, giving further impetus to “German fear,” which so readily turns into hatred of the socially disadvantaged.
The crux of the matter is that this authoritarian revolt will never come to power unless a substantial portion of the functional elites opt for this fascist option. And there are signs of an open split within the German functional elites regarding the participation of a party drifting toward the extreme right in the government. This is the decisive breakthrough: Will entire factions follow the previous AfD sympathizers such as Mr. Müller from Müllermilch or the Mövenpick billionaire Baron August von Finck? In the middle class? Among family entrepreneurs?
In times of crisis, fascist movements only come to power when the upheavals and disruptions have reached such proportions that the functional elites perceive these movements as the “lesser evil.” To put it vividly: only when capital managers have gotten so deeply bogged down in the crisis that they are up to their necks in water do they hold their noses and reach out to the extreme right. And then there is no stopping them, as the fascist authoritarian revolt, which always craves the approval of the authorities, is further fueled by this (which, incidentally, also renders the left's intention to shake up the followers of the powerful fascist masterminds by unmasking them ineffective. Authoritarian characters are not deterred by the camaraderie between AfD officials and billionaires, but rather attracted to it).
Footnotes
1 https://www.imf.org/en/Blogs/Articles/2023/09/13/global-debt-is-returning-to-its-rising-trend
2 https://www.census.gov/foreign-trade/balance/c0003.html
3 https://www.ft.com/content/77faa249-0f88-4700-95d2-ecd7e9e745f9
For more information:
http://www.freetranslations.foundation
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