Functionless profits do not lead to more investments..The market, competition and profit are not ends in themselves. The economy exists for people, not vice versa.
CAPITAL NEEDS A COUNTERVEILING POWER
By Heinz Bontrup
[Capital needs democratic controls. This article is translated from the German on the World Wide Web, http://www.soziales-krefeld.de/BONTRUP.PDF. Heinz Bontrup is a professor of economics in Geisen, Germany and a member of the Alternative Economic Policy study group.]
Germany is deeply pervaded by a sinister neoliberal thinking. A policy allows a pure market- and capital-oriented globalization and liberalization without necessary and sufficient political controls, especially in the complet4ely unbridled financial markets. This misguided policy has been represented as correct for years like a prayer wheel with media support. We are told to accept what humans cause as beyond influence like a force of nature. The only answer is a national supply (profit) oriented economic policy. Entrepreneurs and capital must be advantaged and have the last word. On the other hand, dependent workers have to tighten their belts and be content. Ludwig Erhard, German economic minister for years and later German chancellor saw this differently. He wanted “prosperity for all,” not only “prosperity for entrepreneurs and capital owners.” Willy Brandt also saw it this way.
Under the neoliberal regime enforced for 20 years, the world appears very different. Workers have been an economic reality that can always be extorted. Cutting the meager joint-determination rights is on the agenda of corporations.
The dominant naked fear leads to ever-greater adjustment to conditions and blocks urgently necessary innovations. The jobless should (must) accept any wok. They should not ask about the quality and pay of work. Labor is cheap in every regard. That is most important. Whether people can live from this, identify with their work or lead a planned life is secondary. In contrast, planning security is assumed and demanded again and again from politics for entrepreneurs and their businesses.
Profit soar while wages fall. Ultimately these profits become functionless profits because they do not lead to more investments, growth and employment. Crisis intensifies and unemployment increases because purchasing power demand is lacking. Thus a surplus in the commodity labor leads to paradise-like conditions for corporations and a corporate state. Neoliberal forces in Germany make increasingly outrageous demands that the “great political coalition” fulfills. This has become unbearable. Wages and taxes are driven down. Finally, the welfare state anchored in the constitution dies away beyond recognition. That profits soar is the main thing. Then the amateur economic players, their political cliques and all of us go into the Promised Land of full employment and prosperity. Those with little economic expertise are told businesses and capital will be the losers at the end. They cut off the branch on which they thought they sat secure.
With pure neoliberal supply policy, the capitalist system is extremely unstable. No rate of profit is stable in the long run. Increasingly severe distribution battles occur among dependent workers and in the capital camp itself. Mammoth corporations “devour” smaller and medium-sized businesses. Concentration processes and market realignments with enormous redistribution of profits within the capital fraction benefiting large capital are the consequences. The middle class is bled white. The middle class no longer invests and grows. Under cost pressure, workers are discharged. All this is reality today in an alarming way. Politics also fails right down the line. The one-sided economic neoliberal view prevails in politics. The market rules here.
The market, competition and profit are not ends-in-themselves. The economy exists for people, not vice versa. We must have learned from the past to know what happens when the economy is left to itself.
On account of an exclusively economic thinking, entrepreneurship cannot provide a crisis-free economic development guaranteeing full employment. Capital needs a counterveiling power through an equal worker participation in all economic affairs. Without this worker participation, workers will never have the possibility for influencing and determining their fate themselves. Unions are called to gain democracy in the economy through politics.
Original: Capital Needs a Counterveiling Power