Capitalists are given the freedom to make money across borders by agreements between national state powers, which consider the territorial nature of the business they oversee to be a constraint. States that commit their societies to the accumulation of capital base their own economic position on procuring their financial resources from their citizens’ business and incomes. Their interest in having as much gainful activity in the country as possible includes the use of foreign sources of money. This interest corresponds with businessmen’s need to expand production and trade through the use of foreign wealth.

By internationalizing the sources of their wealth, nations make their wealth, their money, the object of their own competition with other states. By deciding to make their national moneys convertible as required by foreign trade, states grant them the quality of basically being world money, on the one hand. On the other hand, they make the equivalence between their local means of payment and universal money a relative matter. Exchange rates and their balance of payments tell them how much world money they have procured from the competition of capitalists. And their highest national good’s stability, which they define by every kind of capitalist usefulness, expresses the success they want to secure against others.

So the patriotism of money is, firstly, always part of the show. The state supervises free-market business life with the goal of the nation making good money on the rest of the world and thereby making its own currency a sought-after means of business, i.e., good money. In accordance with this objective, state policies try to make sure the nation’s labor meets the requirement of making capital profitable on a global basis. Secondly, this service of politics, to contribute to the working class doing its service, attracts a lot of attention whenever the capitalists’ calculations and results fail to fulfill the service the state has been supporting them for. In such times the nation’s leaders take steps to make their own country attractive (again) in its capacity as a condition for competitiveness.

This is bad news for labor, because such steps are explicitly aimed at it, meaning its profit-earning capacity of course. Although the reforms now eagerly made are openly directed against foreign countries, they get busy on social conditions at home. Political leaders are accepting the judgment the international business world has passed on their working people, namely, that their price and performance have failed to stand the test of global comparison. So the democratic state with its social policies is accordingly ruthless toward the wage-dependent class in using its power over the national wage level to avert further harm from its people and make the capitalist use of labor profitable (again), this being the basis for the nation’s wealth.

1. From the government goal of “full employment” to nations competing for the world’s profit-bringing labor

“Employment,” indeed “full employment,” is part of the economic and social policy program of every government responsible for a nation as a location for capital. All political forces in a democratic welfare state are committed to fulfilling this task, which is taken to be a service to the nation’s welfare in general and to the wage-dependent population in particular. However, there is a caveat of far-reaching significance that this goal tacitly includes and takes for granted. For all the state’s interest in its people being fully employed, in there being a job for everyone who needs to earn money and can make himself useful to an employer, it at the same time shares the very conditional, contemptuous appreciation for the “factor labor” that its businessmen show when using this factor.

On the one hand, the state is dead serious that everyone throughout the country should be working for money. After all, it governs with money its citizens earn. It is from their income that it siphons off the taxes it finances its rule with.^[1] It generously ignores the antagonism between the sources of income, at most taking account of differences in the way money is earned by the techniques it uses to expropriate income as tax and by the extent it does so.^[2] It lives off the total sum in which its society’s economic performance shows itself. Beyond that, the state finances its budget with loans. It doesn’t matter that these loans are capitalistically unproductive — still, they are useful in saving its businessmen some taxes for public-sector services that promote growth at least indirectly. But the business they really benefit is the credit industry; they provide it with money capital that is sovereignly guaranteed and therefore normally regarded as particularly safe. The premise for this, though, is that enough money is earned and enough growth generated in society altogether to justify the credit that the banking industry creates and grants its capitalist clientele and the state. That is necessary for the public power to be creditworthy and stay that way in the critical eyes of investors, since it has no less, but also no more to offer economically than its sovereignty over an active moneymaking society. So the state is extremely intent on a great deal of work being done and money “made” under its rule.

On the other hand, it logically and necessarily makes a distinction between the types of income that is quite different than the merely technical and quantitative one it makes when collecting income tax. Its interest that all wage-dependent people find employment is tied to a condition that reveals the purpose of the desired jobs: wage labor must pay off for capital. A prime reason is that it otherwise wouldn’t be performed in the first place — or at least not for long. This basic law of the market-economy order the state establishes and protects is something it naturally also respects when pursuing its “employment policy.” But a second reason is that wage labor is useful for the state’s monetary needs only when it makes invested capital productive, and only to the extent it makes this wealth grow. After all, the state wants a growing surplus as a source of taxes; and it also needs it to attest the value of the bonds it uses to finance its budget and refinance its debt. For its borrowing anticipates future economic growth, as the material basis for its creditworthiness.

So the state is very intent on there being as many such productive jobs as possible, preferably as many as there are workers available. However, this creates a conflict of economic-policy objectives. For companies, profit-generating labor is their means of competition, so increasing the productive force of labor — in proper relation to the additional expenditure of capital — is a constant concern of theirs, a practical necessity in fact. The state recognizes this as progress of the kind it needs and therefore supports their competitive strategies, for instance with money for science and technology or with credit for important innovations. It also passes laws to secure competitive struggle as the way to further the performance of the nation’s economy. But to firms, their “technological progress” is appealing and necessary because it saves labor costs, “per unit,” and to an extent that secures them an edge over their competitors when it comes to unit labor costs. So they end up reducing the mass of labor that profitably creates wealth. And that confronts the state in very practical terms with the contradiction of capitalist competition, that its decisive means, to increase the productive force of labor, tends to leave the source of the nationally generated surplus unused. The successes of competitors are not added together; they produce losers who cut back or abandon their business using paid labor. On balance, the accumulation process of competing capitals restricts the growth the state is keen on, and leads to workers being laid off instead of the nation’s human potential being fully utilized.

Politicians know an ideal solution for overcoming this contradiction between labor productivity and full employment. It consists in their domestic industry competing successfully beyond the country’s borders. Businesses have to manage to conquer foreign markets, on a wide front, with unit labor costs that are unbeatably low and continually reduced ever further. This is how to achieve a growth to compensate overall for growth being reduced by the method of generating it, to balance out the loss of jobs that success costs, and ideally to ensure that the entire national workforce is exploited with their labor optimally paying off for capital. To this end, the state sets out to promote its domestic companies’ competitive success in international trade. In this case it does not act as an interested nonpartisan standing above the fray of business competition, as it does within its own country, but rather goes into action as a competing party. It goes beyond promoting capitalist progress in its own country to pursue a foreign policy aimed at “opening up” foreign countries — all of them! — to “free trade.”^[3]

This requires energetic use of national bargaining power, for competition between nations naturally comes down to passing on the contradiction between productivity and mass of national labor to the business partners. With their foreign-trade dealings, capitalist nations establish a system of antagonistic relationships of using each other. They compete to utilize the globe for business in such a way as to gather as much of the world’s profitably applied labor under their sovereignty as possible.^[4] On the other hand, the necessary downside of capital competition being unleashed worldwide — masses of unused working population — is supposed to show itself abroad rather than on their own territory. Capitalist nations do not hold with an “international division of labor”! It is against each other that all important states seek their success in global competition — and the unimportant ones don’t even look for, much less find, any alternative to trying to use everything they have and are capable of to link up with world-market business. They are all fighting to make money on each other.

The only question is which money. Answering this question has become a business in its own right, bringing about a string of consequences that that are really bad news for the “labor factor.”

2. National business policy (I): Competition between states over the value of their national money

The highest good in a market economy is, as everyone knows, a relative thing. What circulates in a nation as the quintessence of society’s wealth owes its validity to the power of the state, which — after making its citizens’ survival dependent on acquiring property — gives property its measure in the units of legal tender, and guarantees that a sum that someone has acquired will be generally usable as a means of laying hold of everything that can be bought. Thus the power of money is limited to the territory ruled by the supreme power that makes the laws.

In order to open up markets and sources of wealth beyond their borders to their businesses, states have agreed to recognize each other’s national means of payment as basically equivalent representatives of one and the same supreme good, the power of property to take possession, pure and simple. They thus declare them interchangeable or convertible. This overcomes free-market wealth being restricted to the territory of its national guardian, and introduces a new relativity. There is now a ratio expressing how national means of payment are to count as equal to one another. Major capitalist nations have long since left it up to money traders’ dealings to solve this equality problem. Money traders compete with supply and demand for the various currencies, employing their practical market-economy sense to manage the equations between the national monies that there is no theoretical determination of. This means they are taking stock of the competitive successes and failures of nations in world trade in comparison with each other, as already expounded in chapter V. The results they are constantly updating set essential conditions for how the business of international competition will continue. This applies to cross-border trade in goods of all kinds and, to a much greater extent, to trade in that commodity par excellence that matters most in the developed world market: property’s power to take possession as such, credit. On their markets for lent money and promised returns on capital, money traders sum up and evaluate not only what nations gain or lose in foreign trade, but at the same time and beyond that, and in the end above all, how well a national economy, with its business activity and its overall growth rates, is received all in all by money investors and credit creators from all over the world, that is, by the money traders themselves and their kind. By competing for the best credit deals, they organize and decide, constantly anew, how companies and their home nations compete for capital for their competitive battles.

This achievement of their peaceful world trade gives the highest powers a new and very crucial economic-policy task. The interest of international financial markets in investing in their nation determines the mass of capital available for exploiting the country’s labor power and resources. So it directly affects the competitive power of the nation’s businesses and, consequently, the freedom of the state power itself to procure the funds for its tasks of ruling and especially for serving the needs of its national business life. Conversely, the competitive successes of the nation’s capital provide the reasons for the financial world to be interested in the country. This is a circle, which requires careful attention from the state power in charge. At the same time, the state's need for credit invites investors from all over the world to demonstrate their trust in its creditworthiness in comparison to others. How much trust do they have in the performance of the nation’s businesses as well as in the state’s ability to utilize its country productively?

It gets the answer, summed up in the logical and conclusive way for a market economy, in the form of a comparative evaluation of its money. What is evaluated is the national money’s relative power to lay hold of the world’s sources of wealth, the applicable criterion being stability. This — extremely relative — “attribute” denotes the financial world’s speculative certainty that the nation’s credit and consequently its means of circulation, legal tender, deserve its trust. And this is what matters. For it is the investors’ solid interest in the nation’s credit, registered in how they assess its national means of circulation and payment as a representative of capitalist wealth good to be used any time, that is the basis for the state’s financial power. That is its ability to finance its power according to its needs and at its own discretion. Therefore, the quality of the nation’s money — the result of and condition for the nation’s creditworthiness in total and the state’s financial power in particular — is the primary economic-policy objective for would-be and full-blown global economic powers: that is what they are competing for.

This has consequences for the way states deal with their economic basis. They include wage labor and capital in their calculations from the outset as part of the worldwide accumulation of capital, namely, as an index and as leverage for their share in it. To them, international business is not merely an additional source of profit for their national money-multiplying machinery, but the sphere where the nation uses its money to pursue its economic growth. The means for utilizing the globe as a source of wealth must be provided by the homeland. This affects the political demands on labor and capital in a global economic power accordingly – and accordingly differently.

A state concerned with having a stable money “expects” productive wealth to first and foremost be of a size that makes domestic companies serious competitors of the businesses in any foreign country. It therefore endows important firms with rights and, if necessary, financial resources to help them grow into multinationals. In key industries, it breeds “national champions.” It attaches at least as much importance to financial companies that are, or must be made, potent enough to perform several tasks at once. They must provide important, and potentially important, national companies with enough credit for them to prevail in global competition. They must accompany and manage the foreign exposures of domestic companies, i.e., must also be present all over the world themselves. They must also invest in foreign companies, participate in their growth, and insert themselves into the debt operations of foreign governments, in order to get the nation’s money accepted as a worldwide means of doing business. At the same time, they must act as a contact point for investors from all over the world, market domestic bonds worldwide, and create attractive investments in their domestic currency… And because credit institutions must not only sell a great deal of risks but also accumulate them themselves in order to grow and be able to perform this comprehensive national service, a modern global economic power supports its money industry with security guarantees and with a central bank that provides the necessary liquidity for every business situation.

In addition to a substantial capital size and available credit, the competitive power of a national economy requires a level of industrial development that gives domestic multinationals a leading role in products and production techniques. That costs more money. Therefore, the public sector promotes or makes investments in science and technology to guarantee a competitive edge; preferably in “future industries” that are out of reach for many other countries. On the other hand, a nation with global economic success saves itself the trouble of supporting some branches of business whose labor’s productive force doesn’t justify even the lowest local wages paid for it, and which are thus unable to assert themselves in the international competition for the lowest unit labor costs. That is why general capitalist progress always includes “dying” industries.

A state with global economic success attends to the nation’s labor power, the profit factor “human performance,” in a corresponding way. On the one hand, it offers the nation’s skilled workers, especially young ones, the opportunity to prove themselves as the subjective factor in an internationally superior capital productivity. When industry needs a large number of experts and knowledgeable personnel for its scientific and technological competitive edge, and the nation’s multinationals need them for their global market power, the public sector bears the costs of an education system that ranges from public education across the board to the promotion of outstanding talents, and that at all levels of the job hierarchy is intended to prevent or remedy personnel shortages that would be harmful to business.^[5] On the other hand, a potent global economic power is not only prepared to write off entire branches of industry that cannot be operated profitably compared to the foreign competition, but also the workers they employ, throwing away qualifications previously sought after, and organizing the capitalist surplus in population as a career of pauperization.

Between these two sides, “higher-value” work and no longer profitable “simple” work, modern capitalism opens up a hierarchy of wage-dependent occupations with a quite intentional spread in pay, which must of course not lead to an increase in the overall wage level that would damage business. Policymakers have various methods for countering this danger. For example, in recent decades women have been discovered and put to use as a “labor market reserve,” with the dual effect that their “supply” dampens the costs of demand for labor, and families need two incomes to get by. In addition, the state not only subjects its national labor to the international comparison of profitability, but also internationalizes the “labor factor” itself being utilized on its territory. Global economic powers not only permit but, when required, encourage the immigration of workers whose higher education has been financed by other countries. This strengthens employers’ position on the national labor market and benefits the productivity of capital.^[6] The unemployment that arises on the other side in the “dying” lines of business, and altogether through the increase in the productive power of labor, is attended to by social policies in such a way as to cause a general pressure on wages. The jobless are compelled (in Germany under the cynical motto “We want to support and challenge you") to give up on their career ambitions and work for less pay under worse conditions than before. As for how those still employed are paid, even societies with a statutory right to free collective bargaining leave politicians some leeway here. After all, they lay down the rights and and duties of the bargaining partners, thus making the essential prior decisions about the relative power of each side in a labor-cost dispute. They can also count on the constructive cooperation of their “civil society” in aiming for “wage restraint.” There is a free public opinion that is responsible enough to take sides with the nation’s economic growth, customarily warning unanimously against irresponsibly high wages quite of its own accord. But above all they can count on trade unions to be even more responsible in their collective bargaining with management, recognizing the other side’s publicly approved and politically supported interests as an economic necessity they cannot escape either.

This is basically how every potent global trading state practices its sovereign monetary patriotism on its own territory. It is thereby economically attacking all the nations it is dealing with on the world market. These other nations are supposed to let their business partner earn money and to make its money ever stronger through use for business. The cost of all business success, i.e.,namely, that the increase of capital productivity erodes the source of capitalist wealth, property-creating labor, is especially supposed to be borne by others: they are to be left with a labor potential that has been laid off or never even used. That can be had, but it expands the contradiction of capitalist growth to the world scale rather than eliminating it. Successful global economic power needs global growth and is constantly destroying it in less competitive nations. Therefore, in order to have their capital accumulate worldwide, their credit act worldwide, and their money function worldwide, the leading capitalist states are always in need of new areas for their industrial, commercial, and financial companies to operate. They need new, additional markets and sources of wealth to overcome the barriers that their capitalist progress sets to further growth as labor brings more and more profits. Thus, for this purpose, a state power out to make sure its currency acquires and maintains the rank of undisputed world money must groom the world accordingly.^[7]

Leading "Western" powers of the world economy have achieved considerable success in this area, most recently through the demise of the great “real socialist” exception and China’s opening up to capitalism. They have also succeeded in creating new “future industries.” Along the way they have of course once again managed to over-accumulate capitalist wealth — doing so in its highest form. They have produced a self-refinancing pile of private and public debt the world has never seen the likes of. The phenomenon is not really new, but the extent of it and the duration of the crisis management surely are.

3. National business policy (II): How states cope with their competitive troubles and crises at labor’s expense

States compete to have a maximum of return-yielding work done in their country. This also means that they try to pass on the inevitable damage — jobs that have been lost because they have been made redundant — to other nations. So they necessarily cause each other trouble, the result being that most nations never manage to conquer any shares of world business with capital productivity that sets standards in important spheres, but have to struggle to prevent or compensate for losses in gainful employment useful to the state. The rulers in charge are faced with the necessity of keeping or creating any kind of jobs at all for their people to be able to make themselves useful, i.e., sustain themselves and provide their rule with funds. And the more urgent this necessity is, the harder it is to meet. When a country lacks “employment,” then the state also lacks the means to enable its businessmen to achieve a level of capital productivity that will make them competitive on the world market. The less funds it has at its disposal, and the greater the need to provide the population with opportunities to make money, i.e., to be used productively, the more the state must rely on companies from abroad coming in with the necessary capital and making use of its national labor force for successful business.

To that end at least, a state power can do quite a bit even if it lacks funds of its own for promoting economic growth. If it has its population under control with a proper monopoly on the use of force, then it has the one means it needs to make labor in the country cheap. Ideally it is so cheap that its use pays off for foreign investors, and domestic money owners if there are any. All political leaders know this recipe, and they act accordingly. When the productivity of national labor leaves something to be desired, they organize a poverty to make their people willing to work and make them competitive as a cost factor for capital.

This recipe is in fact always in use everywhere to varying degrees. Even nations with global economic success may suffer defeats in global competition. After all, with their capitalist progress they keep raising the bar for return-yielding work ever higher for themselves too, and making it ever more costly to utilize their own working people completely. That definitely requires some pressure on the costs of work at such expensive workplaces. This applies all the more when successfully competing companies swarm out over the whole world with their wealth and their technical progress and put particularly cheap workers on their technologically perfected “labor-saving” production equipment. Then the skilled workers in proud “high-wage countries” have to accept being directly compared in cost with cheap foreign labor, and the state power cannot help becoming a critic of its national wage level in order to avert damage to its domestic business. Also, when unprofitable industries are being dismantled in the land of an established economic power, it is all too easy to cross the line between better employment and no employment of the redundant workers, and impoverishment is the means of choice for making them useful again. When state leaders who are spoiled by success accuse emerging competitors of paying below-scale wages or the like, this is usually the prelude to introducing in their own country what they are criticizing the others for as violating international rules of fairness.

States, especially the successful ones that do not have to fight constantly for their economic survival, are also familiar with quite different competitive troubles. The capitalist business cycle inevitably switches from “good times” when the world economy grows and its competition is about getting a disproportionately large share of the general accumulation of capitalist wealth, to a “downturn” and “recession” when there is no more growth and definitely no more opportunities to make money for all participants in world business. Then even leading nations, instead of vying for the most profitable workplaces as the vanguard of capitalist progress, must suddenly start fighting mass unemployment. And this is not because they lack investment funds, like the notorious losers of international competition or the “underdeveloped” newcomers to the world market. On the contrary, states and companies are now faced with a consequence of their magnificent capitalist growth. The same recipes for success that until recently ensured positive national results no longer work; even worse, they generate failure. The credit that the banking industry creates with its financial power is bringing about growth that does not pay off, creating money capital that is not earning anything and is therefore worthless, only producing “bubbles” instead of real wealth. Which unfortunately always only becomes evident after the fact. The credit that the state mobilizes with its financial power is not promoting any national success story that positively impacts in world business, but acting as emergency relief for rescuing businesses or softening the blow when they fail. So it is not strengthening but diminishing the creditworthiness of the state itself, ultimately endangering its money that has been put to such unproductive use. The technological progress by which industry procures new revenue is no longer yielding the returns that the necessary investments were calculated to obtain. These turn out to be bad investments, as shown first on the stock markets where they are traded in the form of speculative promises of returns.^[8] And the foreign countries that the most advanced nations, with their superior competitive power and their credit, have opened up for themselves as sales markets and investment spheres are in some cases ruined and fail to fulfill their function as stopgaps for preventing the major capitalist powers’ business from stagnating. In other cases they manage to grow into competitors that the contradictions of growth can no longer be unloaded on.

Instead of successes in the global economy, the leading nations thus accumulate difficulties, all of which have the same economic basis. If investing even more capital than before fails to make the invested capital more productive, if advancing more funds only increases the losses, if the credit that is available no longer finds any sufficiently reliable investment, then too much capital has been accumulated, too much credit put into circulation, too much valorization of capital started for it to be realized in profitable business.

For the states that previously saw their economic power grow and, in anticipation of further growth, increased their economic power on credit, this is the challenge for their economic policy. It is not just about some trouble with the competition; they are losing the national wealth they regard as their acquired right, losing the economic power they feel entitled to gain more of. That is why a recession marks the beginning of unpleasant times in world politics. States start protecting their damaged interests against each other, testing the means they have for blackmail. But they also recognize that something is wrong on their own national business location. Without seeing the reason for their distress of course — the overaccumulation of capitalist wealth — they note that their national economy is failing to provide them with the necessary and due growth. And this is not because there is any lack of credit or material means of business, let alone willing workers, but because the wealth that definitely exists has stopped doing what it is supposed to, namely, continue growing. And as for the reason for that, politicians infer it from the consequence that businessmen themselves draw from their capital deployment being unproductive. If businesses are first and foremost saving on wages, decimating their workforce, i.e., no longer willing or able to afford the cost of labor, then that’s where the state should aim its reforms. The state then also holds the "labor factor” and its price responsible for the nation’s plight, doing everything it can to lower the price, until capital wants labor for profitable jobs across the board again. And those states that have spent decades developing their business locations into nations leading the global economy and maintaining the working population accordingly have plenty of leverage for doing so. Here is a selection — as a reminder of things that everyone knows:

• Social policy makers in well-organized “high-wage countries” create (if they don’t already exist) the legal preconditions, and possibly incentives for employers and pressure on workers, to establish a low-wage sector. They provide freedoms for using badly paid temporary work, legal forms of “marginal employment” and exemption from statutory social insurance, the opportunity to get wage labor at zero cost under the name of “internship,” and more. In such cases, wages are, de facto and sometimes expressly, released from the requirement to suffice for an entire average working life, including retirement and periods of unemployment, by being redistributed by law to account for such phases as well. Welfare payments bring minimal wages, which do not support a “full-time” worker, up to the fixed customary subsistence level, thereby combining poverty and work on a new level.
• In some countries, the personnel for this low-wage sector is supplied directly by the “labor market” with its oversupply of laid-off workers or those who have never even been hired. In others, it is taken care of by the state unemployment office, which has progressed from an insurance-like fund that keeps sections of the redundant part of the working population ready as a “reserve army” for capitalist use, to a kind of welfare that is linked to the condition that the recipients accept any offered “employment” for any pay. At the same time, this kind of obligation to work reduces what a modern welfare state has to spend to maintain its unemployed rather than simply leaving them stranded.
• The low-wage sector and unemployment have a decidedly dampening effect on the wage level in “regular employment,” which every intensification of national competition and every economic crisis make more of a luxury for wage earners. This does not just happen “by itself” either, by workers making a virtue of necessity and being maximally willing to adapt. In countries with orderly collective bargaining agreements, the government makes a decisive contribution itself. It brings about exemplary pay settlements in the public sector and stresses the need for “sensible wage policy,” thereby supporting employers in their demands for lower wages and against any union demands, even the most modest ones. At the same time, it boosts the same unions in their “fight for jobs,” which can practically only be waged (or in any case in well-mannered “civil societies” is only waged) by offering to accept worse pay and working conditions in exchange for those jobs being saved that employers want to keep anyway and that are guaranteed as long as employers expect to make a profit.
• Finally, the governments of traditional capitalist countries have at their disposal considerable portions of the nationally paid wages, namely, the taxes and contributions flowing into public coffers and especially into the social insurance funds. When these freely usable funds shrink because the sinking national wage level makes the absolute wage sum sink as well, this is not merely an occasion for reform-minded social policy makers to cut back all entitlements to benefits, but actually necessitates that they go even further. Rather than sparing wage-earners the socialization of parts of their wages, they spare employers parts of their wage payments that were previously socialized. This is also done by effectively recommending to the collective bargaining parties that the lower deductions be offset against wage percentages. Then the money that employees need for their old age, nest eggs, and health expenses is not a burden on either the public insurance funds or the national wage level, but merely on their net wage, i.e., their personal standard of living. This, too, is a contribution to saving and restoring capital productivity.^[9]

When applying this formula in the fight for jobs, it makes no difference to sovereign administrators of the national business location whether their competitive woes are the result of national losses on the world market due to the success of foreign competitors or whether globally accumulating capital has got itself into a crisis as a whole and nations are battling over how the losses are distributed. Even when far too much credit has been invested worldwide for its use to be able to pay off, when that causes business activities to collapse, claims on capital returns to become worthless, etc., national economic policy makers only notice one thing. They are increasingly displeased to see that there is a lack of growth in the area they are in charge of. And if that is what’s lacking, then it is not capital that has been living beyond its means but its cost factor, labor. Then the labor force has to be made cheaper to put the nation back on the “growth path.”

In reality, this does not let them undo the overaccumulation and loss of value. But that does not bother them, as long as unavoidable losses are mostly incurred by their business partners. That is why national leaders adamantly adhere to their recipe to turn their economy around even when the financial industry itself has nullified on a grand scale the endless mass of credit that global financial markets have inflated themselves with, and that the states in charge have used to keep capitalist world business going again and again through its many recessions. After deciding to prevent the global financial system from collapse by creating unlimited masses of new credit money, they all agree there is a practical necessity to save the now dangerously excessive debt of the states themselves, and the money representing this debt, by reforms all aimed at the same banal purpose of making labor cheaper. It is an absurd calculation that this is the way to consolidate the states’ budgets, and to maintain the value of the accumulated masses of credit and make them capitalistically productive again. The nations’ labor power has long since been cheapened already, and can never become so cheap anywhere that the slight increase in capital productivity to be gained that way could undo the effects of the crisis with its devaluation of capital. To the state powers, however, the disproportion between what can potentially be gained for their capitalists from greater impoverishment and the terrific global economic effect they expect from it is only an incentive not to let any competing nation outdo them in lowering the costs of labor. What they offer their workers as the “light at the end of the tunnel” of their inevitable poverty is the promise that it is at least giving the nation good prospects in its competition over capitalist business locations.

And no doubt they are right about that.

Notes

[1] Wealth’s abstractness, which the state power makes binding by guaranteeing property, vouches for this wealth being directly usable for political purposes. Money provides the state — in perfect accordance with the acquisition rules it puts into effect — with the power to take direct possession of everything it needs for governing, in a universally usable form.

[2] By drawing on wage-earners as taxpayers, the state is making them pay in material terms for the political regime it imposes on them with its private-property system. The gross wage that companies pay to lay hold of their human source of money only reaches the checking accounts of the exploited class as a net wage, after the costs of rule have been deducted.

[3] Capitalist nations do not stand for any nonsense when it comes to enforcing this principle. In the last century, the socialist bloc of states became the most fundamental enemy of the free West for refusing to accept this principle and thereby withholding part of the earth from free commerce.

[4] With each advance in “globalization,” nations have increased the causes for mutual conflict — over the terms for accessing markets and barriers to it, over permission for free movement of capital and limits to it, etc. Trade and commerce — although generally praised as the peaceful opposite of warring between states — in reality bring forth all kinds of clashes of material interests that call for the state monopolists on force to take action, and enormously increase their need for means of “projecting power.” Fittingly, capitalist competition also furthers progress in weapons development; and the credit industry is quite happy to make money financing this state need.

[5] Germany, a many-time “world champion in exports,” for a while liked to define itself as a “country poor in raw materials” whose crucial means of competition was “the raw material, education.” A Social Democratic chancellor even thought the nation’s economic future lay in “exporting blueprints.” This was the ideology accompanying large-scale expansion of universities and colleges during the “social-liberal” era. The zeitgeist of the time advocating an “education offensive” that would make dirty proletarian jobs superfluous and break down outdated class barriers has left no traces in the more recent slogans about promoting education in Germany. The policy is now aimed at thoroughly differentiating and largely devaluing educational attainments, alongside an “excellence initiative” for forming an elite, and altogether intensifying competition at all levels of the education system. Rather than involving a false promise, the message is now a warning that anyone without a certain minimum state-certified qualification need not even hope to get any job that provides a livelihood.

[6] In those rare phases of “full employment,” a state will even recruit labor in countries with plenty of capitalistically useless “human material” and provide an oversupply of labor for “simple jobs” that keeps wages within limits: “migrants” bring their own domestic wage level with them as a basis for comparison.

[7] The worldwide achievements of the main states active in this field, how they powerfully impose the repercussions at home, and how they shape their own territory into an instrument for world market competition — all this is justified in the numerous variations of the ideology named “globalization” as being politically problematic, but above all inherently necessary, ways of dealing with a practical constraint that is fundamentally beyond the sovereign decisions of state leaders and needs to be “mastered” by wise policies. The idea of “globalization,” which has become a generally accepted buzzword, is explained in the article “The myth of ‘Globalization’ / The World Market as an Objective Constraint” from GegenStandpunkt 4-1999.

[8] In such economic phases, the ideal of an economic silver bullet that would open up completely new future prospects for making money often takes the place of actually worthwhile achievements of helpful scientists. Such a “fantasy” often brings about a temporary “recovery” on the world’s stock markets, feeding the next “bubble.”

[9] For employers, the socialized wage components have never been a deduction from their employees’ livelihoods, but rather a surcharge on the “actual” price of labor, so something they need to fight. Social policy makers can only agree with this viewpoint in phases of accentuated national competition and times of economic crisis. However, it is logical that there is all the more scope for cost reduction on the employers’ side the more an economically globally potent nation regulates the support of its working class and requisitions wage components for that purpose. Thus, a fully developed welfare state can prove its worth as a means of competition once again when actually cutting back on its “services.” In the “Great Recession” starting 2008, the German government boasted about the measures its predecessors had pushed through in this area to cope with previous crises (known as the “Hartz reforms”). It cited them as a model and example for how its partners should find their way out of their national debt crisis after Germany had outcompeted them with its combination of capital power and wage level. These governments knew no better alternative, made their people poorer, and just made sure to blame it on foreign governments.

© GegenStandpunkt 2023