Working on this new server in php7...
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Who can afford capitalism anymore? and Why are prices rising?

by Suitbert Cechura and Guido Speckmann Thursday, Nov. 10, 2022 at 3:59 PM

When the state now debates the need to create relief packages for employees, pensioners, unemployment benefit recipients, trainees and families, this is official confirmation that the result of wage labor is also poverty. The majority of citizens find themselves in a dual role...

Who can afford capitalism anymore?

by Suitbert Cechura

[This article posted on 9/11/2022 is translated from the German on the Internet, Wer kann sich den Kapitalismus überhaupt noch leisten?]

If you believe the official announcements, large sections of society can no longer make a living in the face of inflation. They are therefore dependent on emergency state aid.

In this country, capitalism is called a market economy, often with the addition of the word "social," which, according to its representatives and defenders, stands for the best possible supply of people with the goods they need. At the moment, however, this economic system is a sign that large parts of the population are inadequately provided for, since the necessities of life have become unaffordable for many - and will continue to become so.

This is not because these goods do not exist. Economists' statistics show that wealth in the country is still growing - though no longer very strongly - while employment numbers are at record highs. And yet many of those who have helped to create this wealth cannot afford all sorts of things and are dependent on support.

Some people might have doubts about the quality of this economic system, which is considered to have no alternative, even though there are alternatives. Even the state-loyal Ökoprotest waits for some time with the - scientifically certified - realization that mankind drives without a system change toward the abyss ...

The capitalism without alternatives

For many citizens in the country, capitalism is without alternative in a very practical sense: They are faced with the situation that everything is a means of business, i.e. the property of traders and producers, and they are thus excluded from what they need to live.

The only alternative they have is to hire themselves out as laborers in order to get the money they need to make a living.

Everything in this wonderful economy revolves around money. Everyone "has to want it - with devastating consequences for the majority," as a recent series of articles in Telepolis put it.

The predicament of people without assets is not perceived as such by most people, since it is considered normal - and not poverty. People in this situation are dependent on employers who want to use their labor power because they can increase their wealth by using it. This dependency is quite tantamount to an act of violence, as a social physician recently noted:

Mahatma Gandhi once said, 'Poverty is the worst form of violence.' We have the money, we are a rich country.

Gerhard Trabert, SZ, 29.8.22

With the "we", however, the expert assumes a commonality in this society that does not exist - after all, he is talking about existing poverty. If it is at home in a wealthy country, it must be worthwhile for someone. This is, after all, the condition under which the use of labor takes place.

The wages of the employees represent a cost for employers, which limits the profit and the freedom of calculation with the prices. Therefore, wages and salaries are not based on what the so employed need to live, but on business success. Therefore, even on the part of those working for wages, there is always a need for some division of labor in order to make ends meet with the money.

When the state now debates the need to create relief packages for employees, pensioners, unemployment benefit recipients, trainees and families, this is official confirmation that the result of wage labor is also poverty.

The majority of citizens, however, find themselves in a dual role in the market economy: as workers, they have to be cheap; as King Customer, they are supposed to help producers and traders, by buying, to return the money invested in the goods to their coffers at a profit.

After all, the wealth produced by the workers does not belong to them, but to their users, and in order to get parts of this wealth, they have to buy the products.

In this role, they often enough prove to be failures, as their limited ability to pay repeatedly proves to be a barrier when it comes to meeting the demands of the economy in the form of high prices. And so the course of business comes to a standstill. Then there is not only the threat of a bit of recession, but under certain circumstances there is an outright crisis of capitalism.

The fact that regular crises are part of the course of business in a market economy is well known and is expressed in the discussion of the business cycle as a sequence of upswing, boom, downswing, recession and crisis. Nevertheless, crises are always said to be due to a particular situation.

Sometimes it was the price of oil, then speculation on techno-corporations - the bubble - or the unpaid mortgages of small homeowners that are said to have caused the financial crisis; this was followed by Corona - and now Putin is to blame for everything, although it is a crisis that, like many before it in the history of capitalism, emerges as a logical stage in the course of the business cycle.

After all, gas is not simply scarce, but expensive, as are electricity, food and rents. Consumer goods of the upscale variety remain on the shelves because the intended buyers cannot afford them. Increasingly, products are not being purchased, and the market is faltering because the accumulated purchasing power is too low - and at the same time there is too much.

On the one hand, there is too much money that has no worthwhile application, and on the other hand, there are masses of people who cannot afford many things. There are factories that could produce many useful things, but because production is not profitable, they are shut down. There are many people who want and need to work, but are laid off because they cannot be put to worthwhile use.

All this is not denied, but officially announced when there is talk of an impending recession, which is then expected to worsen in the coming months:

The German economy surprisingly grew by 0.1 percent in the second quarter of this year. However, it could have been the last positive news before the start of a longer downturn.

SZ, 8/26/22

Although all this is well known and not new, nevertheless the same ideologies about the workings of the market and its positive sides persist.

Capitalism and its loyal ideologies

In order for the market to have its beneficial effects on people, according to this idea, goods need prices to ensure that they get to where they are most needed.

Accordingly, goods are always needed most urgently by those who have money and can afford to buy them. According to this logic, people with low incomes or no means of their own obviously have no needs - or have no needs at all.

If you can't afford heating, you might as well put on a sweater, so the logic goes. You have to adapt your needs to your wallet and not vice versa (which is now, in times of an energy crisis, being dressed up as a national service).

High prices, as they are currently being complained about everywhere, are also supposed to have an incentive character in a double sense - for the producers: to produce more of the expensive goods and thus contribute to making them cheaper; for those who do not belong to the producers or traders: so that the prices represent an incentive to save energy and to limit oneself. After all, taking cold showers is supposed to be refreshing!

If the high prices or the inflation are deplored, it is usually assumed that one has here something like an automatic market mechanism before oneself, which results somehow from itself. Thus, the explanations for inflation usually turn out to be very poor or circular:

Inflation in the euro zone continued to accelerate at the high level in August, reaching a record high. Compared with the same month a year earlier, consumer prices rose by 9.1 percent... Inflation was again driven by the sharp rise in energy prices. The rise in prices for food and beverages accelerated.

SZ, 1.9.22

Interesting: Inflation exists because prices for energy, rents and food have risen. In other words, prices are rising because they are rising. And this is considered economic expertise in this country!

However, prices do not fall from the sky, but are made by people. Occasionally, the responsible actors appear in the reports as institutions, when gas, electricity or food exchanges are mentioned:

This is becoming apparent on the futures exchanges: Electricity contracts for delivery next January were twice as expensive this week as they were in July and many times more expensive than the long-term average.

WAZ, 8/26/22

On the stock exchanges, investors who secure the disposal of gas, oil, electricity or pork bellies and grain on a large scale trade with a lot of money in the expectation of being able to sell these goods at a profit in the future. To do this, they do not need warehouses, ships or petrol pumps. By buying, they secure the right of access to these goods, which do not even have to be produced at the time of the trade.

Such actors thus exclude all others from the disposal of these goods and can therefore dictate prices to others. The course of business of society as a whole is made dependent on speculation on the stock exchanges.

The free market and its state

Liberal politicians in particular repeatedly emphasize how important the free operation of the market is and how state intervention in this sensitive entity is disruptive. Yet the discussion about energy prices makes it clear that this market would not exist without the state.

After all, the electricity market was liberalized by resolutions of the former black-yellow government under Economics Minister Rexrodt, thus turning it into a business sphere that was previously determined by semi-state monopolies. Now there are calls for a reorganization of the electricity market:

Ursula von der Leyen traveled around a lot on Monday and Tuesday - and during her appearances, the Commission president spreads the message that Brussels will soon do something against the high electricity prices... Besides, the European Union must "make a profound, structural reform of the electricity market."

SZ, 8/31/22

What standards apply there is the subject of public debate: "The rise in electricity prices is due to the fact that on Europe's energy exchanges, the price is based on the cost of the most expensive power plant needed to meet demand... At the same time, this exchange price brings huge profits to favorable green, nuclear and coal-fired power providers.

SZ, 8/31/22

This is where the discussion about the "excess profits tax" comes in. Quite as if these profits were not the result of state trading, but a result of the market, to which the state must now react.

Part of the ideas about capitalism is the ideology that profit is the result of entrepreneurial risk. Businesses risk their money and are rewarded if they succeed, the idea goes. If they fail, they face ruin. That may be true of the baker on the corner, but not of companies that are seen as relevant to the national economy, as the example of Uniper once again makes clear.

Uniper purchased gas from Russia on a large scale and was therefore also in a position to get gas cheaply as a bulk buyer. Uniper resold this gas at a premium to municipal utilities and companies and thus made its business.

Now the cheap Russian gas supplies are not forthcoming, and Uniper's bill no longer adds up, as the company has to buy expensive gas on the exchanges in order to meet its supply obligations to its customers. However, the state, in the shape of its green economy minister, wants to prevent the impending insolvency - because the business is no longer paying off - at all costs:

The rescue package, worth a total of 15 billion euros, includes the federal government taking a 30 percent stake in the MDax group, but this has yet to be approved by the extraordinary shareholders' meeting.

WAZ, 8/30/22

After all, the state has made the nation's supply dependent on the success of this deal. The gas levy is now intended to make the business profitable again, for which consumers will be held liable.

In this way, the Minister of Economics with the worry lines on his forehead makes it clear what is important in this society: the business must succeed, even if the supply to the citizens suffers because they can no longer afford the material of this business - in this case gas.

Winners versus losers and their caretakers

The fact that the high prices not only cause difficulties for households and businesses, but are directly profitable for some, whose profits show enormous increases, is not concealed. For example, not only RWE and Steag report high profits (see WAZ, 24.8.22).

Even if these profits were to be skimmed off by means of an excess profits tax, the state would initially have this revenue. What it intends to use these funds for is then left entirely to the politicians. There are plenty of urgent projects on the part of politicians - from the intended rearmament of the German armed forces to the reorganization of the budget to a black zero, from stronger support for Ukraine or the German (automotive) industry to mastering the transformation of energy policy to, finally, the relief programs for needy subjects.

Before that, however, inflation at least establishes the state as a big winner, whose revenues automatically grow as prices and wages rise. After all, it benefits in percentage terms from every transaction in the form of value-added tax and likewise from nominally rising wages and salaries, even if these represent less purchasing power in real terms.

Since many citizens can already afford little and will be able to afford even less in the future, everyone's sympathy goes out to them. Thus, the next winter is painted in the blackest colors - not without assuring the public that everything will be done to mitigate the damage that is sure to occur. Actually, no one promises to eliminate or repair the damage. Politicians immediately emphasize that the state cannot compensate for all inflation.

The relief packages are intended to make the damage bearable for those who are considered to be particularly affected. And strictly speaking, they are not even promised that, compensation for the damage, as the magazine of the Education and Science Union put it the other day: Chancellor Scholz promises above all respect and recognition in the face of hard times - true to his constantly repeated motto "You'll never walk alone. "Walk on through the rain, though your dreams be tossed and blown" - as the song famously continues. In good German: Even if everything goes to shit - you're not alone!

And the hardships affect not a few in this society:

Because energy prices are skyrocketing, the SPD is pushing for a new relief package. The core concern is to help the socially weak in a targeted way with direct payments: Pensioners, Alg-I recipients, students, trainees. The disbursement of direct payments is obviously based on the energy lump sum that employers will soon pay to employees.

WAZ, 30.8.22

The relief packages make it clear that the largest part of society cannot pay the high prices without government support, thus representing an accumulation of social cases.

These measures do not claim to compensate for the damage caused by inflation; they are intended, see the chancellor's motto, to make it acceptable. In other words, citizens are to have the permanent damage bought off by light mitigation measures. That also seems to come cheap:

Success model 9-Euro-Ticket - times favorably to the Baltic Sea, to the work or to friends: In the past three months, the 9-Euro-Ticket has lured 52 million subscribers nationwide onto buses, regional trains, commuter trains and subways.

WAZ, 8/30-22

Apparently, a large part of the population has difficulty financing a trip to the Baltic Sea, to work or to visit friends, and is willing to put up with some inconvenience, such as full and delayed trains, etc., in order to get to the Baltic Sea. What is being celebrated as a model for success is not a permanent measure, but rather a limited consolation for all those for whom inflation is making life difficult.

The lobby group representing the interests of German employees in the form of the German Trade Union Confederation and its member unions also emphasizes that they are striving to compensate for price increases, although the level of demands already signals that they are prepared to make deals below the inflation threshold.

In the run-up to the demand recommendation, IG Metall boss Hofmann had repeatedly made it clear that the effects of high inflation on employees could not be offset by means of collective bargaining alone, the Handelsblatt recently wrote. His union is therefore demanding from the federal government, in addition to a gas price cap, a reduction in electricity prices and an additional relief package for consumers for the coming year.

So right at the beginning of the metalworkers' bargaining round, the top representative of IG Metall, the world's largest organized employee representative body with 2.26 million members, emphasized that it would be an excessive demand on collective bargaining policy to create a complete balance. This is another way of expressing the fact that, as a trade unionist, the well-being of the economy is more urgent to you than compensation for the losses of your own members.

After all, union representatives have long since ceased to see the dependence of employees on the course of business as a shortcoming that is always detrimental to wage earners, but rather as the positive business basis on which to negotiate.

Thus, the result was foreseeable: "Less money for employees - real wages fall by 3.6 percent due to inflation." (SZ, 24.8.22) To remedy this, the trade unionists do not see themselves challenged, but refer to politics, which just announces the hard times.

The victims of inflation can also be sure of the support of the churches, which have always recommended their subjects to give to the emperor what is the emperor's. They place their support in the traditional way of the emperor. They are demonstrating their support in a traditional way:

EKD Council President Annette Kurschus recently announced that the Protestant church would offer warming rooms and soup kitchens in the coming winter, should more people find themselves in dire straits in light of the increased cost of living, one read in the Westdeutsche Allgemeine.

Certainly, the poor will also be included in prayers and referred to God's help, which provides everyone who believes it with the now really bomb-proof comfort "You'll never walk alone.

The media also accompany the emerging plight of their readers and viewers with practical savings tips that they do not have to reinvent. After all, many citizens have been struggling for years to make ends meet on their limited incomes. And so the ventilation and heating tips, the recommendations for cheap shopping or cheap fuel (cf. WAZ, 25.8.22) have already been in circulation for years and have almost taken on a caloric quality.

The front-runner is probably Bild with its hot tip: Instead of heating in winter, go on vacation!

Warnings are being issued everywhere about an impending raging winter: "In these weeks, people like to speculate whether the energy crisis and price increases will soon lead to social unrest," says Benedikt Peters in the Süddeutsche Zeitung.

By which is meant that citizens could start to resist the constant impoverishment and take to the streets: This August, he said, a new unit began work at the Federal Office for the Protection of the Constitution (BfV). A so-called special evaluation is to find out how hot the autumn on German streets will really be, reported the SZ on 8/30/22.

Thereby it is emphasized again and again that protest and demonstration are allowed in this state. But they must - attention! - move in the area of the permitted, i.e. are not calculated to want to force somehow the policy to something.

If now also the left party emphasizes that it is anxious to steer the possible protest into democratic courses, then this means that everything is to be done for the fact that the confidence in the policy is not shaken. For this reason, the Office for the Protection of the Constitution has already discovered a new field of action for itself: that of delegitimization.

This means nothing other than that any questioning of the prevailing policy that does not share its concerns and does not believe in the legitimacy of the known - no-alternative - constraints constitutes something like a criminal offense.

Thus, the nation is gearing up for a winter that will bring enormous profits to some, while others will have to see how they can get their daily lives in order. One thing to be assured in any case is that those affected will put up with this with a bit of popular murmuring at best.


Why are prices rising?

Once again, the "wage-price spiral" smokescreen is being fired in the inflation debate. But what about profit inflation?

By Guido Speckmann

[This article posted on 8/16/2022 is translated from the German on the Internet,]

Tubes run over a roof presumably of a high-rise building

Energy prices are consistently identified as the main driver of inflation. But that's not all. Photo: Victor / Unsplash

These are the worries you want to have: In February, the chief financial officer of British petroleum company bp, Murray Auchincloss, joked that he didn't even know what to do with all the money his group was making. In fact, it's not just the energy companies' profits that are bubbling up; other companies are also reporting record sales and profits. German listed corporations, for example, earned more than ever before in the first quarter. "The 40 Dax groups alone posted earnings before interest and taxes of 52.4 billion euros, a good 20 percent more than in the strong previous year," notes Handelsblatt. The report goes on to say that thanks to a high order backlog and still strong demand, most companies managed to more than pass on higher prices - and rake in rapidly rising profits.

A remarkable statement. Because here it is stated in plain language that the large corporations are using the prices, which have already been rising since 2021, to increase their profits. The Bundesbank had already drawn attention to this in December 2021: higher costs due to supply and transport bottlenecks would be passed on to consumers and profit margins would be expanded in the event of strong demand.

Perspectives that are rarely heard in the current discussion about inflation. Of course, since the Russian invasion of Ukraine and a possible gas embargo, energy prices have been identified by most as the main driver of current price increases. But at least the focus of the German discussion is the dithering European Central Bank (ECB), which has failed for far too long to raise the key interest rate. And the employees, who must now please exercise wage restraint, because too high wage agreements would set the so-called wage-price spiral in motion. Accordingly, companies would react to high wage agreements with price increases, the unions with renewed high agreements, and so on and so forth.

This has little to do with the reality of current price increases. Even the president of the employers' association, Rainer Dulger, stated this soberly on the occasion of the first meeting on "concerted action" in the Chancellor's Office: Wages are not currently driving inflation. The Economic and Social Research Institute of the Hans Böckler Foundation estimates that real wages will fall by 2.9 percent in the EU and in Germany in the current year.

Instead of talking about a wage-price spiral, it would be more appropriate to talk about a profit-price spiral or profit inflation. In the U.S., a debate about the role of large corporations in price increases already flared up a few months ago. A new word was even invented for it: Greedflation, derived from the English greed = greed.

Not all inflation is the same

Inflation can have various causes, which is why economists distinguish between supply-side and demand-side inflation. These, in turn, can also be further differentiated. For instance, there are wage cost, cost tax and imported cost inflations or market power or profit inflations.

In neoclassical and monetarist mainstream economics, the main explanation is that inflation is caused by an excessively large money supply and thus by demand exceeding supply. This also explains the targeting of the ECB, which has pursued a loose monetary policy for far too long after the financial and euro crisis.

Wages are not currently driving inflation.

Employer President Rainer Dulger

But that hardly helps explain why inflation rates have only been rising since last year, even though the ECB has been pursuing a low interest rate policy since 2008. In 2021, the main cause was the strengthening global economy after the first Corona year in combination with torn supply chains. Already in the fall, there was talk of an energy crisis in the EU. In the current year, the uncertainties for energy supply as a result of the Russian war and the sanctions policy of the West are added to this reason.

The cause of the inflation is therefore primarily the increased prices for energy on the globalized markets. In this country (and in many others), we are dealing with so-called imported cost inflation, as Germany is dependent on energy imports. And since gas is indispensable as a raw material for numerous industries, starting with energy companies, prices are rising across the board. This is because in an inflationary environment, other companies also seize the opportunity to raise prices.

Greedflation and market power

In the U.S., according to Spiegel author Thomas Fricke, companies made more profit in the second half of 2021 than at any time since the early 1950s, with an after-tax profit rate of almost 15 percent. "According to calculations by the Economic Policy Institute, more than half of the increase in prices in the U.S. can be attributed to an expansion of corporate profits. In other words, if companies had not expanded profits, inflation would not have been even half as high in purely mathematical terms." The latest figure was 9.1 percent.

And in Europe? According to ECB estimates, the biggest contribution to inflation in the euro area at the end of 2021 also came from the surge in corporate profits, Fricke said.

The fact that corporations can increasingly use their pricing power also has to do with their market power. The greater their market power, the less competition they have, the easier it is for them to raise prices. And in the wake of years of neoliberal economic policies aimed at privatization and deregulation, many markets are characterized by oligopolies. A Roosevelt Institute study suggests this connection between prices, profits and power.

Speculation and algorithms

It is not only the market power of corporations, in Marx's terms the concentration and centralization of capital, that has increased in recent decades. The role of capital seeking high-yield investments in the financial markets has also been enormously strengthened by deregulation, privatization and over-accumulation in the so-called productive sector. More and more capital is flowing into the financial markets to make short-term profit. For example, also with speculation on oil, gas or food. (ak 671)

As early as 2006, a U.S. report had pointed to a "divergence between the abundant supply of crude oil and natural gas and record high prices," attributing this in part to speculative trading. Since then, the weight of speculative capital has increased, and it is also likely to have amplified, in particular, the rise in energy and food prices since February 24.

Is a new neoliberal rollback being prepared?

Just before the Russian invasion, for example, the Financial Times reported under the headline "Beware the algorithms driving up oil prices" that enormous amounts of capital were flowing into financial bets betting on an oil price of 0. While the trigger for rising prices was a tightening of supply due to the threat of war, the explosion in bets was due to the rise of automated and algorithm-based trading, it said.

In 2019, the Commodity Futures Trading Commission, which regulates futures and options markets in the U.S., had found that about 80 percent of energy trades were executed through automated inputs, up from 65 percent six years earlier. The problem: Algorithm-driven trading relies less on so-called fundamentals and more on short-term market movements. The result is a fuelling of herd behavior - and can be accompanied by violent price fluctuations in either direction. Human and computerized trading strategies are increasingly intertwined, he said, which can lead to unpredictable outcomes, "even more so when shocks occur, as we may see in Ukraine."

Liberalization of energy markets

What's more, energy markets in Europe have been liberalized since 1998. Instead of long-term supply contracts, the focus has been on spot markets. These are based on global prices. As a result, prices fluctuate more frequently because local or regional events are now immediately reflected on the trading markets. In the past, events in the U.S. or China hardly played a role in the European gas market, explains Sven Jordan of the gas company Wingas in Wirtschaftswoche. For financial investors focused on short-term investments, volatile prices are good because they increase profit margins.

Let's keep in mind: A wrong analysis of the causes of inflation leads to wrong countermeasures. Wage restraint means a loss of purchasing power and does not change the increased energy prices. Higher key ECB interest rates will not cause Putin to supply more gas and ease the situation on the gas markets. Higher interest rates will, however, make loans more expensive, lead to less investment, for example in renewable energies, which could make the German economy independent of the volatile prices for fossil energies, and stall the economy. Then there would be falling prices, but also less tax revenue and increased unemployment. Higher interest rates also conjure up a new euro crisis.

It is true that the German government used two instruments, the 9-euro ticket and the gasoline rebate, to bring the inflation rate down slightly in June and July. But they expire at the end of August. Then there is the threat of rising prices - especially since the gas levy will be added from October.

The question is: Why are the political and economic elites pursuing a policy that could end in recession and more poverty? It could be that, as in the 1970s, they want to exploit inflation to bring about a recession and drive up unemployment. In doing so, they could counter increased bargaining power of workers in advance. So surmises Thomas Fazi (, 6/22/2022), an Italian writer and journalist. A new neoliberal rollback, then. Counterargument: The workers are weakened anyway, the collective bargaining coverage in Germany is below 50 percent, in the 1970s it was more than 70 percent. But, according to Fazi, a shortage of skilled workers is emerging, not least due to the aging of the workforce, which should strengthen the unions' bargaining power. In addition, the trends toward de-globalization and relocation of production sites are increasing the demand for labor. These are not the worst conditions for revitalizing trade union struggles.

Guido Speckmann

is an editor at ak.

Report this post as:

© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy