“Growth” Ruthless Criticism


“We must lay a New Foundation for growth” – President Barack Obama (May 2009)


There’s great concern: growth is gone. The government thinks a billion-dollar stimulus package is necessary to get the economy back on track and provide us with positive growth figures. So it’s time to ask: what is growth and why is it so important?

The fans of the market economy claim that its particular advantage is the extensive supply of wonderful and useful goods, and that growth is needed for this; but if that's the case, the current concern makes no sense. If it really were about the provision of a sufficient amount of useful goods – where’s the problem? Five per cent less growth would be equivalent to roughly the economic output of 2006 – and that was considered a good year and nobody talked about a shortage of computers, cars, services, etc. And nobody would deny that, if it really were a matter of supplying of goods, we could also be able to make ends meet with the same productive output as in 2006.

But that, of course, is a pointless obervation. As everyone knows, the growth which the whole world is now so worried about consists not of an increase of useful goods, but an increase of the Gross National Product – that’s the all-important number. The GNP doesn’t add up items, kilos or calories, but prices; and this sum, the addition of pure money numbers, must be increased from year to year. It is not about the goods which could supply humankind, but commodities. That means before every supply there stands the constraint of having to pay for the goods; it is not a question of need or demand, but whether one has money: That’s what the capitalist producer wants to see before he coughs up his commodities, and of course there must be a profit in it. Whether goods are produced therefore depends entirely on whether they can be sold profitably as commodities on the market, and an entrepreneur is interested in producing solely from this point of view.

This indifference to the material benefits of a good is most striking when the entrepreneur gives up production because a higher profit beckons elsewhere, and throws his capital into another sphere. Even natural disasters or an increase in car accidents is very conducive to growth, because these present a business opportunity for capitalists: certainly, values are destroyed, but they are replaced with goods or services, that is, sales by capitalists which expand their capital, and these sales cause the Gross National Product to swell.

The capitalists are the agents and representatives of what wealth is in this society: not the accumulation of useful goods, but the money for which these goods are sold – this is the wealth of a capitalist society. All social life – supply, needs, demand – is subordinated to the private power of money and serves its purpose of making more money out of money. The money that the ordinary people have in their pockets exists for this purpose and is enough, if they are lucky, to buy the commodities they need to live – after the money is spent, it’s gone, and it invariably ends up in the hands of the person who produced these commodities. He continues his production when his money has increased through the return flow of this money; if not, he abandons it.

— In other words: a capitalist organizes production for the sole purpose of increasing his capital; whether and what goods are produced completely depends on whether they perform the service of increasing capital.

— Put another way: what was previously described as a pointless observation – that society could be very well served by the productive output of 2006 – is an absurdity for the capitalist: this would not fulfill his purpose at all; on the contrary: if his capital does not multiply, this is tantamount to the destruction of his capital.

This is exactly what happens in a crisis and coincides logically with an absurdity on a whole higher level: he has produced too many, i.e. unsalable, commodities, and this is the real problem for him: he has not expanded his capital. His capital, which is invested in them, has not been expanded, so that is also too much. Of course, he wouldn’t dream of giving these goods away; he has a different way of dealing with his problem – all the others would be happy with free commodities, thus goods – he stockpiles the commodities, prefering to accept a loss of quality; he lowers the price, but that is already an emergency measure; and that is why he then reduces production or stops it completely. He paralyzes already created wealth and sources of wealth because they do not prove themselves as sources of money. This means that there is suddenly also too much work, namely in the form of people who are no longer needed for producing the commodities and who therefore lose their livelihood. To return to the claim by the fans of the market economy: not only is it not true that growth is needed for the best possible supply of goods, it is even in direct conflict with this supply – as becomes very evident in the crisis.

A second claim made by fans of the market economy is that with growth, and only with growth, there is “prosperity for all.” The prerequisite for this “prosperity” is a flourishing economy, that is, the growing wealth of the capitalists. It is clear that “we all” are dependent on this, and that is why we should and must be concerned that this prosperity works out, so that the capitalists manage their growth. And they must find positive conditions for this. One favorable condition, which the employers’ representatives constantly remind us of, and which the state energetically adopts, is completely as odds with “prosperity for all”: the workers who the entrepreneurs want to use must be profitable; i.e., must submit to the demands of profit with the corresponding consequences for performance requirements and wage demands: low wages, flexible work times, part-time work, lay offs.

Now there is a crisis, which in this respect only means that everything that is otherwise a capitalist imperatives must take effect now more than ever – in the name of overcoming the crisis: again lower wages, more flexible work times, part time work, layoffs, temporary work, and all the other capitalist imperatives. For the benefit of growth, one’s own wishes and needs always have to take a back seat. Modesty is demanded so that the economy advances; “prosperity for all” is the equivalent of renouncing one’s own prosperity. Modesty is enforced in practice and demanded as a virtue – this is the maxim under which a life of wage labor has to be led:

— When the “recovery” comes after the crisis, it won’t tolerate any wage demands at all.

— And when the economy is really booming and prices are rising on a broad front, then there will be a true barrage from the employers’ associations and the economic experts: one price, namely wages, must not rise under any circumstances, because that would destroy the beautiful boom, and the Federal Reserve contributes high-minded arguments about the “wage-price spiral”: if wages also rise along with the general rise in prices, then the other prices can do nothing but rise even more – so if you, as a working person, want to be spared from rising prices, then you must keep your own price low.

The maxim “restrain wages!” applies in all phases of growth. And in all phases, there is one and the same reason why this is good for the “wage dependent employees”: only this protects jobs! This is an interesting admission: if the “wage dependent employees” can expect something from growth, then it is precisely that – a job. The wage it brings, what it demands in terms of effort, and how long such a “job” will last – this is not the question. “The main thing is work” – that is the “prosperity” of the wage laborers, and for this they have to diligently restrain themselves.

To summarize: in all phases of the course of business, workers are addressed as people whose greatest good fortune in life is to “have” a job, and in this dismal figure of a dependent variable of the calculations made by those who really have the jobs, because they are the ones who establish them, they must be ready.

Defenders of the market economy would say that this is a very one-sided and distorted picture. Wage losses or not, job dependence or not – the “prosperity” may not be lavish, but this population’s standard of living has certainly risen in recent decades. This, they say, is due to a “trickle-down effect”: some of the wealth from the top has trickled or seeped down to the bottom. There are two interesting bits of information here: First of all, the yardstick is always the poverty of yesteryear, and if there has been improvement, one can speak of happiness; as a yardstick, it is out of the question which of the many beautiful goods that now exist could be needed. Secondly, and exactly in keeping with this, you must therefore be in favor of the rich getting ever richer, of the much-lamented “gap between rich and poor” getting ever wider, because that’s the only way you can hope for a trickling down and – just imagine – maybe an increasing “trickle.” Another way to comfort those who have been made poor and unemployed by wage labor ...