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Labor Solidarity in Neoliberal Structural Change

by Tobias Kroll Wednesday, Jul. 03, 2013 at 2:26 AM

The self-regulating market and the invisible hand were neoliberal theories of Frederick August von Hayek and Milton Friedman. Submission to the market was described as a natural law, as natural and self-evident as the rotation of the planets. Solidarity and unions were decried as barriers.


by Tobias Kroll

[This 2013 article is translated abridged from the German on the Internet.]

The Tubingen U35 study starts from the assumption that (new) employees are under a modernization pressure. An essential part of this pressure can be described as a "neoliberal modernization pressure" that also affects solidarity action and individual action possibilities. Modernization can be defined as a "political and economic catchword referring to the (self-) dynamic and necessity of continuous choice and improvement in the modern world." From time immemorial, the substance of this "changing and improving" has been controversial and politically contested between wage-earners (above all unions) and the entrepreneur side. The entrepreneur side and economics are dominated by neoliberal ideas and theories. In the last years these are usually regarded as "modern" while emancipatory initiatives are portrayed as "traditionalist" or "preserving living standards."

The structural change under neoliberal signs occurring since the middle of the 1970s damages the solidarity among employees. That is my first thesis. Whoever is interested in realizing a solidarity modern age faces great organizational and individual challenges and is confronted by powerful counteracting forces.


In 1947 an initiative for a renewed liberalism was launched by the Mont Pelerin Society (MPS) (website The long-term goal of the intellectual association was "acceptance of liberalism as a dominant or even absolute principle of social organization," Friedrich August von Hayek said. That was the initiative for a "neoliberal modernization" and restructuring of society. The MPS is regarded as an "organizational expression of neoliberalism" and of the neoliberal International. [The American journalist Walter Lippmann invented the term neoliberalism in the 1930s to describe all those liberal economists, sociologists and lawyers who tried to draw lessons from the failure of liberalism in the first third of the 20th century and the advance of socialism and fascism... Ludwig Erhard, the first German minister of economics often described as the "father of the social market economy," was an MPS member.] Even if there were serious full-blown controversies between "ultra-liberals" and moderate liberals in this circle (particularly in the first years), the core idea of economic liberalism unites all MPS members: the absolute superiority of the free market. In his opening address, the later economic Nobel Prize winner Friedrich A. von Hayek outlined a long-term program. The programmatic goals should be realized by intellectual works (establishing think tanks, lobby work) and influencing politics. Hayek estimated two to three generations for the process of converting neoliberal ideas into practice since "the characteristic climate of opinion" or the dominant world view will have changed. MPS founding member Milton Friedman also changed this long-term perspective. The founding members obviously knew the desired changes would meet a massive social headwind and therefore can only be reached through a long-term change of effective ideas (and paradigms in the sense of Thomas S. Kuhn), the social-economic infrastructure and the creation of practical constraints as urged by Herbert Giersch, "dean of the German national economy" and former MPS president:

"Resistance against the sleekness of the state on the spending side comes from the bureaucracy and transfer recipients. Therefore the thinning must start on the tax side: tax cuts ensure empty treasuries."

Neoliberal positions and theories were dominant for judging and arranging social-economic conditions in the western world in many so-called developing countries from the end of the 1970s ("neoclassical cou9nter-revolution," cf. Todaro 1997) "The praxis of awarding the Nobel Prize for Economics shows that neoliberalism since the middle of the 1970s has been the dominant economic doctrine. In 1974 Friedrich von Hayek, the most important representative of this school, was awarded this prize together with Gunnar Myrdal. Subsequently Keynesians, neoclassicists and neoliberals (including M. Friedman) alternated until this prize was only given to neoliberal economists in the 1990s. In 1998 Amartya Sen was the first "non-neoliberal" to win the prize for his poverty research.

"Anglo-Saxon capitalism gained its new dynamic driven by the capital markets thanks to the reforms of Ronald Reagan and Margaret Thatcher," (Piper 2003)...

In the week after its 1982 publication, the reigning German chancellor Helmut Schmidt described the Lambsdorff paper in his Bundestag declaration as "a turning away from the democratic social state in the sense of Art. 20 of our basic law ("Property obligates") and a turning to the elbow society."

With the memorandum, neoliberalism gained public opinion leadership in Germany. As Christoph Butterwegge said

"Market radicals created in Germany after the change in government from Schmidt to Kohl what market radicals achieved in Great Britain under Margaret Thatcher and n the US under Ronald Reagan. The intervention state was subjected to a fundamental criticism. With the applause of the mass media, a rigorous `reform' politics was introduced that was backward-oriented and `modern' at once."

The main author of the Lambsdorff paper was the economic minister, later Bundesbank president and chairperson of the "Initiative of the New Social Market Economy" Hans Tietmeyer. The ideas were controversial. The unions resisted neoliberal positions and neoliberal opinion leadership and were explicit opponents of the new social market economy and traditional social democracy. The basic neoliberal intentions presented in the Lambsdorff paper were carried out politically by the Red-Green German government under Gerhard Schroeder... Under Gerhard Schroeder, Wolfgang Clement was "superminister" for the economy and labor. Clement replaced Hans Tietmeyer as chairperson of the New Social Market Economy initiative in 2012.

While neoliberal programs were never completely realized politically, the social-economic reality was marked by increasing economic liberalism ("more market - less state," "more competition and more personal responsibility") for 30 years - irrespective of the particular government. In politics, media and textbooks, the neoliberal mainstream is the prevailing knowledge on economic processes ("dominant cultural capital"). [This dominance continues in practice even though "neoliberal" positions are increasingly put in question by economists since the eruption of the great 2008 economic crisis. Some consequences of neoliberal structural change occur belatedly and diffusely. As the sociologist Pierre Bourdieu said, "In France, the state has withdrawn from many areas of vital necessities. The consequences appear in enormous suffering."] Neoliberals like Hans Tietmeyer worked stubbornly behind the scenes of different German governments as economic "experts" in the conversion and spread of neoliberal ideas. Tietmeyer influenced the line of the European Central Bank and the European Masstricht treaty.

Over the years the social infrastructure became increasingly "neoliberal." Many things are no longer consciously observed and become foregone conclusions or doxa, in the opinion of Pierre Bourdieu. "The transition to `liberalism' occurs imperceptibly like the continental drift (Bourdieu). Since social fields and the persons acting in them develop parallel and in diverse interactions, the increasing economic liberalism (more market, less state, more personal responsibility, more competition and so forth) obviously influences the habits of individuals and affects their subjective actions and solidarity conduct. A decline in solidarity on the job often going along with increasing competitive thinking between employees and departments was identified by many researchers of the U-35 study.

The social market economy that previously was the unwritten foundation of economic policy in Germany was defined as the foundation of the German economic system in the international treaty between West Germany and East Germany of May 18, 1990. The social market economy - like "modernization" - is a very controversial term...

The core neoliberal idea is that the market economy - when it functions unhindered - does not need any social correction. "The market economy is social policy in itself," Hans Tietmeyer explained (cf. Der Spiegel 26/1985). Today's neoliberals in Germany see themselves in the "true" tradition of the social market economy that in their view passed through many malformations and must be brought on course. Ultimately they orient themselves in the basic idea of the invisible hand of Adam Smith... Competition is the core idea of German neoliberals. Originally intended to prevent monopolies and market power, competition has become an end-in-itself and is often presented as a normative claim to persons on the operational or company plane.

Functioning liberal markets are seen by neoliberals as a quasi-natural system and structure that can be compared with the system of planets and "the course of the stars," not as a creation of human culture ("culture" in the sense of antithesis to nature) critically, Kroell 2010). Like planets, people rotate around market competition. The system is disturbed by state economic activity and publically administered social security that treats individuals as children... The state merely has an oversight function in this perspective, monitoring the undisturbed, trouble-free running of the perfect free enterprise system.

The framing conditions have changed through globalization. The social market economy has put on too much weight (Rodenstock 2001). The economic, political and cultural environment has fundamentally changed.

"New answers must be found to these challenges that are oriented in the old successful principles. The conversion of a new social market economy is imperative" (Rodenstock 2001).

Seen this way, neoliberal policy ("modernization) in the eyes of its defenders is merely the "necessary adjustment" of the social-economic infrastructure to the global economic developments of the last years on the basis of well-known neoliberal formulations and the correction of "malformations" through "eexcessive redistribution by social policy." Neoliberal lobby work and politics actively influence the change of the infrastructure as for example the framing conditions of the labor markets or when the solidarity social security systems are wantonly lowered and increasingly individualized or "privatized" (which usually hurts the subjective feeling of social security):

"... Politics has already introduced effective corrections, de facto pension cuts as a `demography factor' or `pensions' at 67. A good example is the capital-covered Riester pension. Constant drops hollow out the stone" (Weiss 2007).

Hayek's idea of enshrining liberalism "as a dominant if not absolute principle of social organization" over a period of three generations does not seem far removed from today's reality. Randolf Rodenstock updates Hayek's approach in the neoliberal Initiative to the New Social Market Economy:

"Whoever wants to realize the New Social Market Economy must bring the whole population on board" (Rodenstock 2001).

The terrain is certainly very contested. The hierarchy of power and the structural action options have shifted through the neoliberal influenced structural change.


"The assumption that the conduct and solidarity actions of employees stand under modernization pressure was the foundation of the Tubingen U-35 study," (Held 2011). Globalization brings increased chances but simultaneously raises "competition- and adjustment pressure in economic policy," Randolf Rodenstock said in his plea for a New Social Market Economy. Modernization should be seen as very ambivalent and can also bring growth in subjective freedom.

Four phenomena are named in the U-35 study in which modernization pressure is manifest: restructuring, subjectivization, precariousness and economization (more correctly, "commercialization").

Restructuring in the great framework of change from the industrial- to the service society is connected with the diffusion of new technologies.

The service- and knowledge society of the 21st century came out of the industrial society of the 1950s. Information- and communication technologies lead to an unparalleled innovation push. The rigid work rhythm is mostly long passe. Flexible working hours and independent work mark the daily routine of many employees (Rodenstock 2001).

Subjectivization of work can be understood as a consequence of neoliberal policy. Persons often become "entrepreneurs of their own work-power" (Moss/Pongratz 1998). Personal responsibility is especially emphasized.

"Precariousness as increased insecurity is also a consequence of the neoliberal restructuring of society. Safeguarding life risks that cannot be answered individually (for example unemployment, sickness and accidents) is increasingly "privatized." Collective public security systems are driven back in the name of "personal responsibility" and rejection of a state slandered as "patronizing or treating people as children." "Precariousness is everywhere," Pierre Bourdieu decried (1998). Jobs limited in time and part-time positions are on the advance. Precariousness has become part of a novel form of rule "based on the establishment of an insecurity that has become a general permanent state and has the goal of forcing employees to submission and acceptance of their exploitation," Bourdieu declared (1998).

Economization or commercialization of vocational and private life is part of the increasing authority of market mechanisms in more and more social areas.


The term "solidarity" is closely connected with the term "social." Organizing and maintaining this system better, i.e. protecting the system from collapse is central for defenders of neoliberalism - on the basic assumption that a liberal market economy is always per se the best-possible system and leads to the best-possible results. Some neoliberal lobbyists advocate state bailout programs for banks in crisis situations (socialization of debts and private profits) which in principle contradicts neoliberal theory. "Leftist" economists who also urge this demand a socialization of the rescued banks in order to socialize later potential profits.

Solidarity from the neoliberal perspective is usually considered socially-organized solidarity. The focus is on state or public-legal social security systems. These should only serve as base security. Neoliberals warn that collective public security systems can be exploited by individual egoists. Individual privately organized social security is urged and carried out as a counter model. The danger of the exploitation of these private systems (whether by profit interests of insurance companies or the ruthless conduct of individual insured) is not thematicized.

Worker solidarity is see4n as "selfish group interest," not as solidarity... "Job holders" build their position unscrupulously "through strangulation of market mechanisms" and "increase their income with more comfort" (cf. Gillies 2000). A division of society and a weighing down of the social treasury threaten.

Changes of the whole social infrastructure are justified by neoliberals showing solidarity has its limits:

"Solidarity rests on a moral foundation, basically on Christian charity. But solidarity must also be protected from abuse. The majority subsidizing a comfortable minority would be a perversion of social thinking" (Rodenstock 2001).

In this perspective, solidarity - speaking in an exaggerated way - is greatly damaged by a few persons who unjustly receive income support. In principle this justifies privatizing the whole social security system, urging more personal responsibility and shifting the main responsibility for averting social risks (sickness, old age poverty, invalidity and unemployment) to individual persons and simultaneously subjecting a large part of essential expenditures to private profit interests (for example, privatization of old age necessities). A minority puts those under pressure, for example, who pocket enormous profits with their speculative financial investments and at the same time drive crisis-prone economies into ruin, put solidarity in the sense of a legal-public social security and enrich themselves at the expense of the general public is not meant by Rodenstock by "a comfortable minority."

Selfish conduct on markets is always social since markets in themselves in the neoliberal way of looking at things lead to "social results."

Neoliberals also operate with undefined or poorly defined terms like "benefits":

"That they - intentionally or unintentionally - benefit society through their conduct is common to all entrepreneurs. What is useful to society is social when the term is not abused as a word-joker for everything as happens all the time today" (Rodenstock 2001).

Rodenstock complains that "social" is used as a "word joker" and in the same breath uses "being useful to society" as a word joker.


While solidarity from a neoliberal view is a secondary social organization principle to the free market, solidarity from the union view includes struggle against the praxis and ideology of economic liberalism, i.e. the praxis and theory of capitalism (On the term capitalism, West Germany's most influential economist Herbert Giersch says: "Market economy in its pure form includes the different points: decentralization, subsidiarity, competition, self-regulation, privatization, private property and individualism)).

There are also power struggles in the unions and conflicts over direction like the power struggle in IG Metal in 2003. The CDU- Bundestag spokesperson Friederich Merz described the conflict as a conflict over principles. This conflict resembles the dispute in the SPD between "modernizers" and "traditionalists" at the start of the Schroeder government. "What is now happening in IG Metal is in truth a struggle over principles, over relapse into old ideologies or modernization (... ). We face the question whether there will be modern unions in Germany in the future (Friedrich Merz 2003).

The unions see the well-known double character as an "integrating ordering factor and system-countervailing power" manifested again and again in inner conflicts. At the beginning of the Federal Republic of Germany, there was an important battle between the entrepreneur side and unions. Directly after the Second World War, unions had "a comprehensive political mandate." This happened in the conviction that "capitalism and democracy are incompatible in the long-term." In Horkheimer's words, "whoever does not speak about capitalism should be silent about fascism" [There were similar firm beliefs "in conservative Christian groups" after the Second World War (Negt)].

A central thread of inner conflict between system-stabilization and system-conquest expressed time and again in factional disputes at the top of the unions runs through the history of German unions. Unionists stabilized the existing system at the beginning of the 2008/2009 financial and economic crisis... There was at least the chance of identifying the structural problem of the German economy - dependence on exports based on auto manufacturing - as a fundamental problem and supporting a social-ecological change instead of helping stabilize structural weakness based on extreme neoliberal export orientation. The short-term solidarity with national businesses to "protect" the jobs of employees in auto production represses basic problems of economic dependence that could cost enormously many jobs in the medium term.

There are many treatises on solidarity and unions but not a uniform interpretation. The interpretation can be as different between full-time unionists and "simple workers" as between so-called "modernizers" and "traditionalists" at the top of the unions. The analysis of strikes and solidarity union campaigns can reveal the actual attitudes and actions of union employees...

It is simpler to pass on the positions and demands of leading unionists and programs of principles. IG-Metal chairperson Hans-Jurgen Urban defends "classical" (or "classical left") union perspectives with international ways of looking at things and is not afraid of union self-criticism...

May 1 was always a day of international solidarity. But this good tradition often ends at the garden fence of one's own concerns" (Urban 2011).

Urban emphasizes "overcoming an economic order that divides up the world into people with and without life chances."

Solidarity with work migrants with simultaneous combating of wage dumping and exploitation.

Solidarity with the unemployed, ALG 11-recipients and employees in low wage sectors: "We may not join in the division in employees and unemployed. The jobless have lost their job, not their claim to solidarity" (Urban 2011).

Solidarity citizen insurance for all employed persons with higher contributions for higher incomes:

"Whoever has strong shoulders can also carry more" (Urban 2011).

The goals are a solidarity social state and a "just distribution of income, assets and life chances" (Urban 2011). The struggle is for a society "where solidarity and humanity need not be fought through again and again against the interests of small minorities."


The relations of young employees to unions cannot be described in an across-the-board or all-inclusive way. These relations are different according to occupational fields. The individual spectrum extends from the identification of young employees with entrepreneur interests ("unions only put stones in the way") to the acknowledgment of unions as an important social institution far beyond the concrete representation of the interests of employees in the enterprise and in wage negotiations. In his book "Gegenfeuer" (Counter-Fire), Pierre Bourdieu criticized the systematic destruction of collectives through neoliberal policy (1998). The active persons are inevitably changed through increasing isolation, "more personal responsibility" and the division of the workforce into regular personnel and subcontracted workers. When selfish conduct promises more or short-term success, solidarity decreases as some interviewers of the U-35 study corroborated. It is also obvious that "more personal responsibility" tends to go along with "less sympathy" and less solidarity. This is even defended without shame by neoliberals:

"Competition, that principle of venture and pursuit, the hunt for the best possible and most reasonable solution, is the center of the free enterprise model. No one has any problem with that in sports. The principle of chasing after the higher and better result is generally accepted in sports. Centimeters and thousandths of seconds are involved. The public gives thunderous applause. The thought of applauding the last place competitor never occurs. A single parent implies pseudo-social problems. No pardon is given in the battle for the maximum athletic performance or achievement" (Gillies 2000).

The "classical" organization of activity in large enterprises encouraged the organization and learning of solidarity conduct of employees in praxis. According to Oscar Negt (2005), factories in the past were "compulsory collectives" of workers. This collective increasingly decays (flexibility of work, subcontracted work). "Neoliberal work organization" adjusts to this (competition between departments and employees).

As a result the framing conditions of the work field become more unfavorable for organizing in a solidarity way. A "marketable disposition" promises a greater monetary success - not least in the short-term. Solidarity cooperation on the job can only arise where people meet and have (temporal) spaces enabling getting to know one another. The flexibility of working conditions and increased subcontracted work opposes this. Solidarity has fewer and fewer chances when work fields are dominated more and more by market mechanisms. Pierre Bourdieu compared the neoliberal restructuring in its effect with the HIV-virus: the defense mechanisms of the victims are attacked (Bourdieu 2011). Bourdieu had these processes in mind.

Whoever is interested in a sustainable solidarity modernization faces the great challenge of collaborating in strengthening the resistance forces "against the neoliberal invasion" - parallel to the ongoing social conflicts - in the re-creation of stable spaces that favor or make possible social solidarity conduct and learning experiences.


"Slip Sliding Away," Daily Kos, June 29, 2013

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