Who Is to Blame for the Crisis Outbreak?

[Part II of a three-part series on the crisis in capitalism, originally published in German here; part I available here (German), here (English), and here (Greek)]

by Tomasz Konicz
translated by Joe Keady

No One Is to Blame for the Crisis: Crisis of Capitalism, Part II

The more the crisis intensifies, the more mutual blaming dominates the public discourse around it in almost every Western country. Meanwhile, it appears as though every nation and every relevant social group is, in fact, responsible for some kind of aberrant behavior that has contributed to the disaster that is currently unfolding before our eyes in Europe.

The German government and its austerity policies, for example, are being blamed throughout almost all of Europe for escalating the debt crisis that is pushing the European currency area toward collapse. The weekly left-liberal British paper New Statesman reached a new high point in this rising wave of criticism of the German austerity dictate with its most recent front-page story, declaring that Angela Merkel is the most dangerous leader in the world and depicting her as a Terminator who is bound by an austerity fetish and, due to the increasing suicide rates in Southern Europe, as already having “blood on [her] hands.”

Outside of Europe the criticism of Germany has also reached something of a consensus level, as the German media were forced to notice during the G20 summit:

US President Barack Obama and the heads of state of India, Brazil, Argentina, and Russia had only crushing verdicts for Merkel’s policies, which they say are leading the global economy into recession.
- Spiegel

In Germany, there is also a belief that the debt issue has been adequately settled. From Thilo Sarrazin, an immensely successful one-man resentment-production specialist, to “economics professors” emeritus like one Ottmar Issing, it is the lazy southern countries that are responsible for the crisis. Issing got right to the heart of this distorted interpretation of the crisis – which effectively ignores Germany’s enormous current account surplus in comparison with that of the eurozone – in an article for the national German daily Frankfurter Allgemeine Zeitung:

The realization that the problems in each country, almost without exception, can be attributed to their own mistakes is being restrained less and less. Excessive wage increases over many years (not least of all in the public sector), unsound financial policies in no small number of cases, and unrestrained lines of credit for banks had to end in crisis.
- Ottmar Issing

And furthermore, of course, the mean and nasty bankers and speculators who contributed to the development of gigantic speculation bubbles with their extreme greed are also held responsible for the present chaos. This is another argument made by the New Statesman in its critique of Merkel mentioned above. It blames “the world’s ‘top’ bankers” for the outbreak of the crisis, which Merkel’s “deficit fetishism” has only made worse. Right-wing extremists and right-wing populist forces, however, blame foreigners, the unemployed, refugees, welfare recipients, Muslims, Jews, or Roma, as desired, for contributing to the crisis dynamic in one way or another. Thilo Sarrazin recently added a broad new facet to this extreme-right phantom by connecting the alleged Southern European sloppiness with the weather. Specifically, the unrecognized SPD satirist claims that the weather imprints itself on the “popular character”:

In my book, I call it the fog factor. The foggier and colder the winter is in a given country, the more solid its finances. If one is forced by nature to prepare for hard times, that obviously has an impact on the character of a people.
- Thilo Sarrazin

Winter in Singapore, which achieved a budget surplus of almost 3% in 2011, must be murder.

Personifying the Causes of the Crisis

All of these more or less credible crisis interpretations and their corresponding allocations of blame are based on a shared basic assumption: The crisis was caused by the aberrant behavior of some particular individuals, groups, or social strata that disrupted capitalism’s smooth operation. The premises of all of the crisis interpretations above is roughly, Somebody must have violated the noble laws of the market economy, thereby causing the present chaos. Blame is then allocated according to one’s ideological preference: The bankers were too greedy, the Southern Europeans lived beyond their means, Germany has lapsed into an “austerity fetish” and is leading the world toward a depression, foreigners took away our jobs – or the debt crisis is the result of a “popular character” determined by the weather.

Without exception, each of these interpretations of the current systemic crisis of capitalism blames a group of people for a crisis that was caused by deficiencies in the guilty parties’ character, culture, or race. The causes of the crisis are being personified, by which the current dislocations are traced back to the characteristics of the group of people or nations that are affected. But the social system in which these scapegoats operate remains unexamined in this personification. In everyday awareness, capitalism has long since sedimented into human beings’ natural state, no more worthy of reflection than, say, gravity.

In fact, the basic assumption of this scapegoat theory as explained above has to be changed into its logical opposite in order to pick up the trail of the actual causes of the crisis. The crisis erupted, therefore, because all of the participants fulfilled their economic functions within the market economy brilliantly. Nobody is to blame for the outbreak of the crisis. Capitalism is undergoing a systemic crisis precisely because all of its economic subjects are doing exactly what the system demands of them as efficiently as possible.

Work is Leaving the Working Society

Under capitalism, as is widely known, everything revolves around the most effective increase – also known as exploitation – of the capital that is used. Capital, in turn, is a social relationship that people are obligated to enter into and by which money produces more money through the most efficient possible application of wage labor in commodity production. For that reason, capitalism is also quite correctly described as a working society. This capital relationship based on the exploitation of human labor is therefore undergoing a fundamental crisis because the actors who participate in it have organized this social process of capital exploitation more and more efficiently.

To hone in on this apparently paradoxical diagnosis, it is helpful to take away the veil of the “self-evident” and the “naturally developed” that always surrounds the capitalist social formation. Capitalism is not a contradiction-free natural law. It is not an eternal precondition of human existence but a historical social system that was only fully implemented roughly in the territory of present-day Germany in the mid-19th century. That is just over 150 years in which this extremely dynamic yet unstable social disorder has degraded nearly everything and everybody to a commodity and made the market, which had previously had a marginal existence, into the absolute authority on human socialization. Human history has therefore predominantly unfolded beyond the relations of capital – i.e. beyond wage labor, market, and money, which had previously only been marginal phenomena in all social formations.

All historical social systems obviously have a beginning and an end: they go through a period of ascendancy, reach the peak of their development for a certain period, and then ultimately decline. In the present era, the development potential of the capitalist social formation is reaching its limit due to the increasing contradictions inherent within its social order. The need that market competition creates for ever more efficient commodity production in pursuit of the greatest possible reproduction of capital leads to increasingly streamlined production. Employment in established industries therefore declines more and more intensely such that newly developing economic sectors would have to absorb the labor force that has been made available to prevent unemployment from continually rising.

As a result, the capitalist working society is permanently at odds with itself in that the most efficient application of wage labor simultaneously drives wage labor out of commodity production. This internal contradiction within the capitalist working society can only be maintained in “litigation” – in a state of permanent “forward flight”: In this process of “structural shift,” new products and branches of industry must create new employment opportunities for the available labor. (See also: Die Krise kurz erklärt).

This structural shift has not been functioning since at least the 1980s because the use of computers and electronic data processing throughout society as a whole has unleashed enormous streamlining drives that have made wage labor increasingly superfluous for producing commodities. Consequently, the work is falling out of the working society precisely because all of the participants are working increasingly efficiently by using the most up-to-date technology (see also: Das Ende des “Goldenen Zeitalters” des Kapitalismus und der Aufstieg des Neoliberalismus).

Expansion of the Financial Sector Delayed the Crisis of the Working Society

More than anyone, we have the “greedy bankers” to thank – and, in Europe specifically, the indebted Southern Europeans – for the fact that this crisis of the working society has not fully exploded over decades. The enormous expansion of the financial sector since the 1980s created a temporary refuge from the crisis of the working society because the accompanying debt orgies and speculative excesses also created additional demand and opportunities for work. So it was the financial markets and the bankers that kept capitalism functional and financed with credit – at the cost, however, of constantly growing mountains of debt that are now collapsing on top of us. This pile of debt therefore represents the fully developed achievement of the financial-market jugglers who kept a social system that was being destroyed by its own internal contradictions alive for decades by mortgaging a future that has now run out.

This crisis constellation of a late-capitalist system, which can no longer operate based on enormous productivity drives without debt, also produces the deeply absurd character of the present course of the crisis: Misery is increasingly rampant precisely because more and more commodities can be produced in less and less time with less and less labor. The system is choking on its own productivity. This insane contradiction is clear wherever goods and commodities for which there is no more market demand are destroyed while more and more people can no longer meet the needs that those products would have covered.

Homes that were built during the period of excessive speculation, for example, are simply being torn down more and more frequently despite the fact that the number of people in the United States or Spain who have been left homeless by the crisis is increasing. The scarcity of, for instance, living spaces that now prevails despite an abundant material supply is attributable to the fact that under capitalism, commodity production is always merely a means for achieving the end-in-itself of perpetually increasing reproduction of capital. Material wealth, the use value of the goods that are produced, has no value under capitalism and must be destroyed as soon as it is no longer useful for turning money into more money.

But on a societal level, the economic subjects unconsciously make the systemic contradictions that underlie these obvious absurdities worse. The market’s participants allow this crisis dynamic to escalate, but they do so in a blind process that instigates its own momentum and consequently confronts people as an alien power in the form of “markets.” This process takes place “behind the backs of the producers,” as Marx put it – simply because all of the participating market subjects are trying hard to manufacture their products as cheaply and efficiently as possible and to sell them on the market for the greatest possible profit. Nobody is in control of the resulting crisis dynamic in capitalism; it is driven by a proper motion of the highest possible self-valorization. It is precisely because all capitalists’ constant effort to manufacture their commodities in the most efficient way possible was advanced so successfully that capitalism now finds itself at an insurmountable limit whose catastrophic crossing can only be delayed through continued processes of debt creation.

Capitalism, consequently, is characterized by the subject-less rule of the market-mediated principle of capital valorization. Individual actors – including the most powerful bankers and capitalists – only function as character masks of their economic function. A Josef Ackermann or a Ferdinand Piëch can therefore only act as autonomous subjects within their own company or bank when they pursue the maxim of the highest possible valorization of capital. For that reason, regardless of individual market niches, there can also be no “good capitalists” or bankers who would refrain from exploitation, labor intensification, mass layoffs, or wage dumping because if they did, they would be destroyed by market competition. The economic function of the “captains of industry” therefore also attracts people with the corresponding disposition – the ones who are able to enjoy it there. All good-natured and considerate capitalists have long since gone bankrupt.

But the market-mediated, subject-less rule of capital relations does not mean that this system’s leaders can simply be excused en masse. The persons involved deliberately pursue these functions. Under capitalism, the operation of which always literally produces mass murderous consequences, countless politicians, bankers, and capitalists have saddled themselves with an enormous debt. Yet this happens because they execute the laws of the system and not because they would violate them. When, for instance, employers lay off masses of workers, they consciously drive other people into misery – yet this takes place in harmony with the systemic imperative of maximizing profit. The same can be said of bankers who make fortunes with an array of new “financial instruments” at the height of real estate speculation. The bankers’ and managers’ extreme greed that we often hear babbled about are therefore not a product of any moral defects on the part of these individuals, rather they are a reflection of this system’s innermost driving principle. Getting worked up about out-of-control greed without looking back at its systemic causes is therefore simply naive.

The intolerable state of our world as it devolves into chaos is therefore not the result of violations against the lawfulness of capitalism but of the merciless execution of its laws. The only reasonable moral response is not to point a finger at individual actors but to insist on the necessity of a humane societal alternative.

The next article will address the question of how the eurozone, of all things, has found itself at the center of today’s crisis dynamic.

2 comments on “Who Is to Blame for the Crisis Outbreak?

  1. It’s true that nobody “caused” the crisis, and of course it’s wrong to seek personal culpability for a systemic failure.

    However, I think the sentiment against Germany in the European periphery is legitimate, because it’s not about the culpability for crisis, but rather the issue of how the crisis is politically processed.

    Austerity policies are a **decision** of Germany’s political class, and can be criticized as such. The sphere of valorization and capital accumulation cannot exist without a political framework. Not for nothing did Marx eventually intend to write a book on the state.

    Marx’s Capital is excellent for explaining the dynamic of the capitalist mode of production. But moving to the complementary sphere of politics, that’s where we need Pashukanis, Gramsci, Poulantzas, Joachim Hirsch, Althusser, Heide Gerstenberger, and other theorists of the state.

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