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Exodus from the System

by Horst Alfheldt Saturday, Apr. 23, 2005 at 4:47 AM

Other causes contribte to the economic misery besides the distribution problems. There are two developmental problems. There is the shift of profit from labor to capital. There is the worldwide opening of markets causing wage pressure.


Horst Afheldt on Ways out of Unemployment

[This interview published in: SoZ (Sozialistische Zeitung), April 4, 2005 is translated from the German on the World Wide Web, Horst Afheldt’s latest book “Wirtschaft, die arm macht. Vom Sozialstaat zur gespaltenen Gesellschaft (The Impoverishing Economy. From the Social State to the Divided Society), 2005 is in its 2nd edition.]

[On March 9, 2005, hr2 radio broadcast “Class Struggle – How Long Will the Social Peace Last?” Alf Mentzer hosted an interview with Horst Afheldt on ways out of the crisis. The interview is representative of the growing reflections on a non-capitalist economic system.]

Mr. Afheldt, an “impoverishing economy” is a question of perspective. Germany is certainly not a poor country. Why has our German social state fallen under pressure? What is the problem?

The problem is that Germany’s present state that you describe correctly as a country not yet poor is a transitional state into poverty. The growing unemployment demonstrates this. What causes this crisis? What can be done?

You wrote in your book: The gross national product shifts away from labor to capital. What does this mean?

Since the middle of the 1970s, our gross national product has doubled. However this 100% growth only brought the skyrocketing of unemployment from 250,000 to 5.6 or 8 million. This is a massive dislocation.

The second point is: How can we remove unemployment through growth if 100% was not enough in the past? We cannot advance this way! A distribution problem is central.

What is the direction of distribution? From workers and wage-earners to the corporations?

A multiple distribution problem is occurring. The first question is: Why does the income of wage-earners disappear? Less and less comes out of the economy. The economy consumes what it produces more and more for itself. Subsidies are awarded as with Airbus 380 or a national railroad through a nature reserve. Rivers are deepened for trading vessels, properties are opened up and communities offer all kinds of help to firms enticing with new businesses. Then there is the road building for the endless convoys of trucks needed by this form of economy…

Why doesn’t this result in more jobs? If great investments were made and vast funds are available to businesses, why is nothing happening on the job side?

Businesses with massive capital exist. The public services like universities, schools and kindergartens are harder and harder to finance because this economy consumes more and fewer taxes are paid.

Thirdly, we have a division of society into sinking incomes of dependent employees and fast rising income from property, businesses and assets. However this rising income is concentrated in favor of big business and large assets. This is a general trend of this economic system. We are still relatively far behind.

Is Germany behind other states in Western Europe? Where is this development heading? What are the concrete models for our orientation?

In Germany the richest 10% of households have 47% of the assets. This is far behind others. The English are on the path that we will also travel. 1% of the population has 23% of English assets. The US at the top sets the direction. In the US 1% of the population has 45% of the assets, not 23% as in England. Between 1983 and 1998, the poorest 40% of Americans lost more than three-quarters of their modest assets.

What counter-measures are possible for the state? How can this development be stopped?

This development cannot be stopped within the existing system. The system is so structured that the stronger prevails in the competition. There is no way within the system of the open world market to insure permanent prosperity for all. In this system, division according to the model of the social structure of developing countries is inevitable: a rich upper class, a weak middle class and impoverished multitudes.

Must we uncouple from the global competition to take countermeasures?

You are now on the way to a solution. Uncoupling is very difficult and requires reflection. Nothing is proposed since no one works on this uncoupling. Most try to find a solution within the system.

Other causes contribute to the economic misery and the threatened descent of most wage-earners besides the distribution problems addressed in the brief radio interview. First of all, there are two “developmental problems.” There is the shift of profit in production and services from labor to capital. Technical progress replaces people with machines. Secondly there is the worldwide opening of the market that manifests as wage pressure in European countries and shifts production more and more into low-wage countries.

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