[Full Text from Gegenstandpunkt: Work and Wealth]
In our society everything we need already exists. Only: the things we need must be bought. They are always the property of someone else. If we can obtain the things we need to live only by buying them, then we are fundamentally hindered from making use of them. Private property separates us from our vital necessities; this society is based not on providing people with the things they need, but excluding them from them. This is a relationship based on violence.
If people are excluded from the means of satisfying their needs by property, then the purpose of this society is not simply supplying people with what they need. They are separated from what they need. Rather, the purpose is a matter of everyone seeking to take advantage of this separation. The needs of others are the lever to do it.
Violence is inherent in this form of wealth. This violence is not historical, but is produced every day and maintained by the state guarantee of private property.
Things are produced in our society for sale. Things are produced as the property of individuals who do not need them and do not want to use them. They are produced solely for the goal of attracting money from other people’s wallets. If they are not turned into money, they are worth nothing – no matter how useful they may be. The value of a property is measured not by its use in consumption, but only by money.
Conversely: one can access the things one needs only by buying them. Money is the means of access to social wealth. Money is the prerequisite for meeting any need. So one must make sure that one has money.
The usefulness of work does not lie simply in the product that is produced, but in the money that it earns. The purpose of capitalist production is money. Because money has a limitless quality, its increase is limitless – and the work for it can never be enough.
Without money, no useful things. So everyone must make sure that they have money. Anyone who does not have as much money as he needs for his living costs has only one way to get it: he must work for someone else. He is an employee.
The employee must find someone who has so much money that he does not need it for his own use, but can spend his money in order to make more money with it: an employer. He pays wages to the employee. The employer employs the employee only if – and as long as – the work is worthwhile for him and his property. For the employee this means that he – and thus his living costs – depends on creating wealth for someone else with his labor. And given the need to provide for his living costs, he does not have a choice whether he works or not.
On the side of the employer, if the work of the employee does not pay for itself, then he must adjust its cost or lay him off. And the only criterion for the wages and the conditions of work is that the work is worthwhile for the employer – otherwise no employment takes place. This also means that the employee must subordinate his available time and sacrifice his health for the increase of somebody else’s property.
The size of their property divides these two into different social types. One works and thereby produces alien property and is dependent on this service to alien property, the other has property on which the first one is dependent and invests in order to increase his property.
The augmentation of the employer’s property results only from the work of the employee. The employer must invest his money in two “factors of production.” On the one hand, he must buy means of production (machines, buildings, raw materials, etc.). This does not diminish his property; it only changes its form. The investment costs reappear in the product price. No increase in property occurs from this. On the other hand, the money he pays as wages to his employees is lost to him. But with it he acquires the right to have them work for a certain time. Working conditions, type of work, time period and, above all, the results of work - the work products – belong to the employer. This newly created property has increased only through the expenditures for labor. Labor is therefore the source of his property.
The employee gets nothing of this newly created property. It belongs to the employer who employed him and paid him a wage for his work. So for the employee working for wages is identical to exclusion from the property that he creates. The employee is required to use his wages to support himself and are therefore an unsustainable form of property. His spends his earnings on the essentials for living. At the end of the workweek the employee is just as poor as at the beginning of his workweek. As the employee is employed for wages by the employer only to serve the aggrandizement of his property, the production sphere is not only where the employee is used in order to increase alien property, but is also where the class division is produced and reproduced at the same time.
At 67 the employee gets social security. The employee works nearly his whole life in order to earn a few bucks to make a living, and nevertheless ends up dependent on social security. His dependence – because he is without property – forces him to do this and to increase somebody else’s property. Thus his destitution is useful and necessary so that business makes profits and so that economic growth takes place.
The employee leaves the company just as devoid of means as he arrived, since the wealth produced by him belongs to someone else, and he is excluded from it.
The employment contract makes the worker’s ability to work available for a certain time period for wages. Conditions, applications, type of work and level of output – all are the concern of the employer. On one side, as the employer buys the worker’s ability to work, he transfers property – money in the form of wages – into the hands of the worker; on the other, he acquires the source of property production – the worker’s ability to work. The use of this source increases his property, and the work efforts of the workers are nothing but the increased property of the employer. The wages are then not only payment for the work done. They also contain the conditions for certain work efforts that the worker must fulfill in order to receive the payment: by linking wages to time, effort or quality, their amount is made dependent on fulfilling the requirements of the company.
Wages are paid as piece rates or hourly wages: The wage level is bound to the number of items produced or the time spent working. Only then the employee receives the full wage level. He must be interested in his own use – from which he receives only damage.
Work as the source of wealth is subjected to the criteria of private business success: the work was beneficial only if it was a source of profit. Otherwise the result is worthless. Work as a relationship of expenditure and yield is thereby measured according to a standard that does not originate anywhere near the work itself.
In the expenses for work, the actually performed work – the time and effort of human beings – does not count; only the payroll spent on the work counts. So wage lowering reduces the costs for the entrepreneur and thereby increases the work of his company.
The workers must pay for their work being measured by this standard: because if wages count as costs, then the living expenses of the workers – the wages – are a quantity which can be minimized. And if their output increases wealth, then the worker’s sweat is the quantity that can be maximized. Even if the worker’s sweat cannot guarantee profit, because the produced things must still win sales on the market against the competition, the work of the worker is deemed responsible for this success within the competition. So the labor of the workers must prove itself in this competition even though the work in the form of the finished goods on the market – viewed objectively – is long over.
Businesses calculate their accounts with profits that they can only obtain on the market. They all say that profits are made on the market because of the fierceness of the competition. Managerial policy is always aware of the objective requirements of competition. Whether the entrepreneurs announce layoffs, eliminate Christmas bonuses or fight work-free Sundays, they do everything only because they are “forced by the competition.” Even the entrepreneurs themselves are victims of the competition and because of the competition they need to expense their losses.
This ideological hypocrasy separates the goal of the entrepreneurs – the increase of their property – from its means: they achieve this goal “only on the market” because that is where the entrepreneur meets likeminded people. Thus the entrepreneur is not a victim but an agent of competition, who, if he takes up its requirements, intensifies them because he wants to have success, just like the others.
The ideology that sees the entrepreneur as subject to enormous objective constraints acts as if business is not an interest, but a natural consequence of production. Public acceptance of this ideology of “objective necessities” shows that in this society this mode of production is considered the most natural thing in the world, and the entrepreneur’s point of view is the only one that is valid, to which everybody must adapt their own expectations.
In their calculations businesses take market prices as their benchmark. Their profit consists of the difference between the market price and the cost price of a product, multiplied by the number of goods sold. Companies compete for a limited solvent demand and try to win market shares away from their competitors. In order to win sales for their products against their competitors, they must offer their products at a cheaper price. Over time this pays off only if they lower their production costs. The constraints of competition manifests itself in a price war: if one lowers the price, the others must follow suit in order to stay in business.
The means to lower the production costs is rationalization. If the efficiency of the work rises as a result of new productive inputs, the wage portion of the production price of the commodity sinks. Making the work more efficient lowers the operational labor costs for the company.
The economic logic of this operational calculation knows only costs and their impact on profits: rationalization takes place only if the acquisition of a more efficient machine saves more in wages than the machine costs, relative to the product.
A machine is not used to increase productivity so that less trouble is necessary for the production of a commodity, but so that paid labor can be saved on.
The use of the more productive machinery is decided by the owners. Its first productive application is laying off workers. But the company is not satisfied with that. New demands are made on the remaining workers since the jobs that remain have become ever more expensive with the rationalization:
So whether one has the "bad luck" of being laid off or is "happy" to still be employed, with the increased efficiency of labor the workers are excluded from an ever larger part of the wealth created, simply because wages amount to a smaller part of the value of the product.
Entrepreneurs fight for market shares to increase their profits. They wage this battle as a price war. In order to lower the manufacturing costs of their products, they increase productivity. By making the work more productive, they lower the wage portion per commodity.
Because of the price war on the market, the entrepreneurs think that their profits arise not from the labor they employ, but from saving on wages in the production of a certain mass of products; for the entrepreneurs, wages appear on their balance sheet as a pure deduction.
In order to retrieve a higher profit from their employees, they reduce the number of workers. In order to increase their property by appropriating as much work as possible from their employees, they reduce the work necessary for the production of a certain number of goods. Because all the entrepreneurs rationalize like crazy to survive the competition, this generally lowers the product prices and thus what they can obtain for their products in money. In their competition for the solvent demand that realizes their surplus, they lower the surplus in relation to the investment, and thus their rate of profit. This paradox is the necessary result of a competition in which entrepreneurs fight over shares of the produced wealth at each other's expense.
For this contradiction only one adequate solution exists: the workers are made liable for the net yield of the company by work time extension, wage lowering, more intensive and more productive work.
In their competition, entrepreneurs assess the prices of the competitors who they want to overtake and undercut. This requires money to pay for the expenses of the rationalization necessary to reduce costs; it is not paid from the money that a company has from running its business. So that they can successfully win the competition, businesses must overcome the limitations of their own property. They must borrow money.
If the means for rationalization are made available by credit, then competition forces everyone to economize with credit. Everyone who does not want to be punished with failure must find a backer who will only lend money when it pays off. Companies must prove themselves credit-worthy, i.e. offer their backers a sufficient guarantee that their money is well spent.
In order to obtain credit as a means for competitiveness, a company must make itself the means of credit
The financial business pursues their business interest by lending money: they require interest as the price of lending money to a business for a certain time period. Their property, their exclusive power over money, is the only and sufficient reason for the fact that the money-lenders can require a tribute for renting their money.
Since the credit giver has a claim to get back the lent sum of money plus a fixed increase, he treats the business of the entrepreneur as if it is already successful. Furthermore: each credit lender treats his promissory note to future profitability as already available wealth on hand: banks treat assigned credits on their books as assets on which they can assign new credits; entrepreneurs treat the promises to pay of their buyers like money, who for their part pay, etc.
Promises to pay, money that still has to be paid, debts, lent money, all are thus treated like disposable money: for this reason property doubles itself. Of course, only as long as credits are actually served, i.e. the entrepreneurs make sufficient amounts of profit. On this, both the credit givers and applicants for credit are equally interested. They argue over the interest rate for their portions of future profits.
Property as credit is a claim to the fruits of future exploitation. Those that lend their money require interest; with the borrowed money the others get the next round of competition.
With credit, promises to pay are treated as available wealth. Thus the increase of money is anticipated in practice. That it actually comes off is supposed to be a natural consequence of labor, which must then prove that the requirement of the property to become ever larger was well considered.
Credit releases from all external limits the interest in making a given amount of money into more money. Money not yet earned from sales on the market becomes available for further increase. All business possibilities, judged as an investment of funds, have to be placed in comparison as to how much net yield they promise to throw off for the employment of money and how high the “business risk” is. Thus the companies are forced to not only produce a surplus but to withstand an industry-wide requirement for profitability at the highest level.
This is a requirement dumped on labor that is not in its power to meet. Thus work is saved on in every way; it is constantly concentrated and used exhaustively so that it fulfills the requirements. And where it does not justify those claims, it is made completely superfluous.
With credit freeing money augmentation from all external limits, companies are able to maximize output with their rationalization efforts.
They orient themselves solely by their debts, in which their future business success is calculated as a requirement. They ignore the limits allowed by the market, which is the only place where they can earn real wealth for themselves.
This leads periodically to the event that sales prospects and thus debt operations come to a general halt. If the entrepreneur cannot sell products any longer, the proceeds of which belong to the creditor, he needs more borrowed money in order to service his debts.
The granting of credit becomes ever riskier if large companies do not make profits in sufficient amounts to justify their credit. The banks must decide whether they write off their money lent so far by withdrawing credit or lend yet more money which is ever more uncertain of returning again. Because they persist in the equation of lent money with genuine wealth, they intensify the criteria for credit-worthiness.
If confidence in the quality of debts lapses, the real course of business is confronted with the requirements of the creditors. They reclaim their money and companies go broke. Credit withdrawal in one place leads to an inability to pay in another place: shares get purged, payments not covered, a bank collapses -- this has consequences for other banks and companies ... the crisis expands. Demands are made and wealth destroyed until it goes back to the former condition.
This “healthy” contraction happens at the expense of labor whose last use exists in its deactivation. After a crisis there is a gradual increase in the reserve army of labor. The maximum productivity of labor is the basis on which exploitation continues.
a) Globalization: “we are compared!” - the construction of an false necessity. Anyone who talks of “globalization” talks as if the requirement to be compared internationally is “simply so.” The “globalization” ideologists maintain the absurdity of a comparison with no interest behind it. If all states see themselves subjected to this comparison, the question arises how else the obligation to compete comes into the world than by the fact that states want to use the international market and therefore undergo comparison on the world market? There is a requirement to compete only relative to the interest to take part in the competition. The key word “globalization” suppresses the fact that the states of the world only enter into comparison on the world market because they want to use it for themselves. The interest in the world market appears as a necessity. Thus the state is explained as the victim that is suffering from comparisons!
b) Globalization is commitment to the world market. From the diagnosis of this uncomfortable coercion nobody then advises that it would be better to leave it. No state wants to leave the world market. “One can no longer remove oneself from it,” it is said, and in the same breath it is said that world market competition is an external constraint on the state at the expense of the nation, one that it does not actually want. Commitment to the world market could not be more unconditional when it is explained as the fate that a “globalized world” now imposes.
c) Globalization is the need to enrich oneself at the cost of others on the world market. If politicians talk about “globalization,” they do not want to passively watch the world market, but “face the new challenges,” as modern state leaders justify acting responsibly. With this weak explanation they give themselves the order to agressively decide the comparison on the world market, i.e. to emerge from the competition against all the others as the winner.
d) Globalization is a declaration of class warfare from above. The state uses its sovereign force appropriately. Its “location” should be an unbeatable offer to the businessmen of the world. It intentionally comes to the finding that wages are too high. Those who must live on them are informed: “you lived above your means,” in order to pull through a savings program which lowers the standard of living of the wage earning population across the board.
This demonstrates that the wealth that concerns the states of the world market is based on the poverty of the masses.
Domestically, the state obligates everyone within its reign to make private money the only means of getting by. In this way it informs all citizens of their class-specific service for property. This way it provides for domestic accumulation, from which it avails itself for its part in servicing the creation of surplus.
Abroad: in the name of economic growth the state sits down with foreign powers to make relationships that allow its entrepreneurs access to foreign sources of wealth. Thus work has to be put to the test of an international comparison of wages and output at commodity prices suited to the world market. The exploitation standards reached by each nation become the criterion for investment decisions and the objective necessity to globally reduce the price of labor, a cost factor.
Inside the nation, legal tender circulates whose validity the state guarantees by force. In order to make foreign trade possible for its entrepreneurs, the state must provide for the international validity of its currency by guaranteeing its exchangeability against any other currency. But it needs a public treasury with reserves of foreign exchange and/or precious metals. Thus the ability of each state to make possible for its entrepreneurs the use of the world market depends on the fact that it obtains a national surplus in international trade. In contrast to its businessmen, who import or export if it is worthwhile, buying and selling, the state must arrive at a positive balance of payments. The fact that a state exported more than it imported is equivalent to the fact that elsewhere this relationship precipitated in reverse. The success of nations is thus necessarily the failure of others.
Nowadays nations that always wind up losers in international trade, which not long ago would have had to leave international trade because of their national bankruptcy, no longer do so because of the fact that states no longer insist on payment of the deficient balances. The states mutually grant each other credit. It is crucial for the world market that the debtor nations do not fail as buyers, and their entrepreneurs make international business possible for successful states without consideration for their own public treasuries.
Because state bankruptcies are impossible now, the criterion for national success has changed. The power of a nation to access foreign wealth depends on the stability of its currency, which depends on the demand for it.
The determination of the rate of exchange is left to the financial markets. The demand for a currency depends on the extent to which it works satisfactorily as a means of business. By this criterion useless local money is separated from good money. Currencies which deliver the goods on the basis of effective demand are promoted to reserve currencies, real world money: their attractiveness depends not on fluctuations in the course of business, but in that it is considered world-wide as a means of storing value. A currency that is a means of storing value offers universal access to the wealth of the whole world. Because it is universally accepted, such states can incur debts for themselves for an unlimited period.
Since a rate of exchange is the relationship of currencies to each other, the success of one nation is equal to the failure of another.
As soon as states worry about the worldwide success of their currencies, they aspire to attract world market-suited capital to their territory because only this guarantees that the global players demand their currency.
The money patriotism of modern states therefore makes only one demand on capital in its own territory: it is to out-compete the foreign competition and to answer the question: which money sparks international demand in its national interest?
The national interest is no longer to make business possible abroad for its national entrepreneurs, but to get world market profiteers on its territory. In addition, incentives for investment are offered to the multinationals, which are national companies adapted to the world market.
The wage level is in principle a location disadvantage everywhere; in wealth production it is a cost factor on which the state attempts to save.
The location competition over the lowering of wages is for the state an advantage in still another regard: saving on wages does not damage accumulation. Just the opposite: in contrast to the establishment of all the other conditions for accumulation, wage lowering does not cost the state a penny.
With a universal lowering of wages the state demonstrates in practice the judgment that wage dependence is the negative condition for wealth. The standard of living of those who live on wages is no contribution to the growth that is the concern of the state, but is seen as only a detraction from it.