Capitalism Without Labor: Myths about Politics, The Global Economy and The Future of Democracy by Ulrich Beck Beck

[Marge, Bart, and Lisa go to their local "Bookaccino" superbookstore.]

LISA: I'm going up to the fourth floor, where the books are!
BART: I'm going to taunt the Ph.Ds!

[Bart approaches the three workers at the espresso bar, all of whom wear glasses and bored expressions.]

BART: Hey guys! I heard a new assistant professorship just opened up!

[Ph.D'd baristas gasp and lean forward eagerly.]

BART: Yes, that's right. At the University of ... PSYCH!


Diatribe of a Mad Housewife




 

What are you? At a dinner party (in a private bungalow, served leg of lamb Tuscan style, conversation tone: ironic) this question is not answered by naming one's hobby ("pornographer"), sign of the zodiac ("Aries") or, as was usual up until now, one's profession, but rather by stating one's career as an unemployed person. Even the unemploy­ment office no longer knows class distinctions.

The members of the „achievement elite" (as Germany's Free Democratic Party, the FDP, calls it) try their best to take the absurdities and humiliations of the job search iro­nically. A teacher entertains her listeners with the story of how the unemployment office suggested she take part in the very same "How to Write a Cover Letter" course, which she herself taught only a short time ago. A biologist with years of research experience triggers tears of laughter by mimicking the language mistakes and methodical blun­ders of the personnel manager who interviewed him. Then comes the punch line of the story: the biologist is rejected because of overqualification.

For a long time now, job insecurity has not only been a "lower class" problem. It has become a sign of the times. The “job for life" is threatened with extinction. No one wants to believe this also means the demise of a value system, of a society centred around gainful employment. Capitalism is extinguishing labour. Unemployment is no longer a marginal fate; it affects potentially everyone, as well as the democratic way of life. Global capitalism is casting aside its responsibility to employment and demo­cracy, while undermining its own legitimacy. Before a new Marx wakes the western world, long overdue ideas and models need to be translated into a new contract with so­ciety. The future of democracy needs to be re-legitimated above and beyond the labour society.

For example in Britain, one of the great labour nations, only a third of the work force, in the traditional sense, is fully employed (in Germany it is still over 60 per cent). Twenty years ago it was over 80 per cent in both countries. What is considered a cure - a flexible job market - has only treated the symptoms of unemployment rather than the disease itself. Meanwhile, unemployment continues to grow, along with the new statistically deceptive part-time positions, lack of job security and the silent labour reserves. In other words, the volume of labour is rapidly disappear­ing. We are heading towards a capitalism without labour in all post-industrial countries of the world.

Three myths hinder public debate from deciphering this situation. First, there is the obscurity myth, that everything is much too complicated anyway; second is the service myth, that the pending upswing will save the labour society and third is the cost myth, that if we drastically cut labour costs, the problem will simply vanish.

That everything is connected to everything else (if even tenuously) and is, because of this, obscure, is surely appli­cable to developments on the job market under pressure from globalisation. This includes secular trends, as demon­strated in Meinhard Miegel's international comparative studies, presented to the Commission for Future Issues of Bavaria and Saxony at the last conference in Dresden. According to his study, the labour factor has been con­tinually upgraded over generations. In the middle of the 70's a turning point occured. Since then, a decrease in jobs can be observed everywhere, either directly through unemployment (like in Germany) or indirectly through the exponential growth of "colourful forms of employment" (like in the United States and Britain). The demand for labour is sinking, while the supply of labour is rising (also through globalisation). Both indicators for the increasing loss of gainful employment - unemployment and under­employment - are alarmingly high.

The problem is no longer the distribution of jobs, but the distribution of joblessness, which is disguised by the new hybrids of unemployment and employment. Together they are officially catagorised as "(full-time) employment" (limited duration, trivial, part-time, etc.). This is especially true of those would-be job paradises in the US and Britain, where those in the grey zone between work and no-work must often be content with starvation wages. The grey zone has constituted the majority for a long time now. Thus, many are deceiving themselves. With each crisis the soup of the labor community is diluted even further.

A large, growing section of the population has only inse­cure "joblets," offering no secured (long-term) livelihood. Politicians, institutions and we ourselves think in the ficti­tious conceptual world of full employment. Even building and loan associations and insurance agencies make deci­sions based on the assumption that people who are em­ployed have a steady income. This stereotype fails to account for the rapidly spreading "neither/nor" category, neither unemployed nor a steady income.

Mothers give up their jobs for their children. However, the three-phase model they follow no longer exists. The third phase - re-entry into the work force after the children have left home - presupposes the illusion of full-time employ­ment. We complain about "mass unemployment," there­by presuming life-long, full-day work until retirement is the natural state of a grown person. Even former East Ger­many was, in this emphatic sense, a labour society. Now one must speak of widespread unemployment in the new German states.

Many believe, hope and pray that the service society will save us 

from the evil dragon of unemployment. This is the service myth. Claims and counterclaims still have to stand the test of time. Surely new jobs will be created. However, for the time being - as the sociologist Wolfgang Bonfr shows - just the opposite will occur. The traditionally sta­ble employment areas in the service sector will fall victim to an incipient wave of automation. For example, tele­banking will lead to the closing of branch offices in the banking industry; the German Telekom wants to save some 60,000 jobs by offering new services; entire professions (e.g. typists) may disappear.

Even if new jobs are created, they can easily be situated anywhere, thanks to digital technology. Many companies - most recently American Express - are setting up entire administrative departments in countries with lower labour costs (in this case: southern India).

Actually, contrary to the prophets of information society, who predicted a surplus of high-paying jobs even for peo­ple with a basic education, the sobering truth is even the large number of jobs in data processing will become poor­ly paid routine occupations. The US Secretary of Labour Robert Reich writes, that the rank and file of the informa­tion economy are the hordes of backroom data processors sitting at computer terminals connected to databanks worldwide.

Nevertheless, the key illusion in this continuing debate is the cost myth. A growing number of people are infected by the often militant belief that only a radical reduction of wages and other labour costs can lead out of unemploy­ment. Here the guiding light is the "American Way.” However, if one compares the US to Germany, one sees that the American "employment wonder" has a flip side. Highly qualified, steady, well-paid jobs in the US are crea­ted at a rate of 2.6 per cent. That's as often as in the top- wage country of Germany (OECD statistic from April 1996). The difference lies in the increase of unskilled, poorly paid jobs. Germany still (!) sees it as a problem that people, who work during the day for - let's say - seven marks an hour, sleep in cardboard boxes at night. A labour productivity comparison also breaks the spell of the American "solu­tion." In the last 20 years, labour productivity in the US has increased by only 25 per cent, in Germany, on the other hand, by 100 per cent. "How do the Germans do it?" asked an American colleague recently. "You work the least and produce the most."

This is a prime example of the new productivity law of global capitalism in the information age. Increasing num­bers of poorly skilled, globally interchangeable workers can supply more and more services. Economic growth no longer reduces unemployment, but rather the opposite, jobs. It thus becomes jobless growth.

But do not fool yourself: the "owner-only capitalism" aimed at nothing but profit, that shuts out employees, the (social) state and democracy, also revokes its own legiti­macy. While the profit margins of global companies are expanding, they are depriving the expensive countries of both jobs and their tax base and are burdening others with the costs of unemployment and the price of civilisation. The two chronically poor - public and private sector em­ployees - are supposed to finance what the rich are also enjoying: the "luxury" of a second modern age: highly developed schools and universities, a functioning transpor­tation system, the preservation of the countryside, safe streets and a colourful urban life.

When global capitalism in the developed countries dis­solves, the ethical core of values in the labour society, a historical alliance between capitalism, the social state and democracy will be shattered. Democracy in Europe and the US came into the world as a "labour democray" - to the extent that democracy is based on participation of la­bour. A citizen must earn his or her money in one way or another in order to bring the rights of political freedom to life. Gainful employment has continually legitimated not only private but also public life. Therefore, it is not just about a million unemployed workers. It is also not just about the social state. Or the prevention of poverty. Or the ability to achieve justice. It is about all of us. It is about political liberty and democracy in Europe.

The West's linking of capitalism to political, social and eco­nomic basic rights is not simply a "charitable social act" that can be dispensed with when times get rough. Socially padded capitalism is more of a response to fascist experi­ences and the challenges presented by communism.

It is an act of applied Enlightenment, This rests on the be­lief that only people who have a place to live and a steady job, and therefore have a material future, are or will be­come citizens that will make democracy their own and will bring it to life. The simple truth is: without material secur­ity there is no political liberty; therefore no democracy. New and old totalitarian regimes and ideologies thus be­come a threat to everyone.

The new historically inexperienced pseudo-Free Democrats or the Free pseudo-Democrats need to recognise that the market fundamentalism they worship is a form of demo- > cratic illiteracy. The market does not legitimate itself. This economic form can only survive in an interplay between material security, social rights and democracy. Those who place their faith only in the market will destroy democracy and this economic form as well.

No one questions capitalism today. Who would dare to? The only powerful opponent to capitalism is the "profit- only-oriented capitalism" itself. What is bad news on the job market is good news on Wall Street. The calculation behind this is simple. When labour costs fall, profits rise. Moreover, the contradictions presented by "jobless capital­ism" are becoming obvious. Managers from multinational corporations are moving their administrations to southern Italy, but they are sending their children to top European universities.

It never occurs to them to move to where they are transferring jobs and to where they pay low taxes. They themselves are taking advantage of the expensive political, social and civil rights, white torpedoing the public financial base for these very things. They go to the theatre. They enjoy well taken care of nature and landscape. They romp around in the relatively violence- and crime-free cities of Europe. But at the same time, through their “ego- economy" and profit-oriented policies, they are contribut­ing fundamentally to the destruction of this European way of life. May one ask where they or their children want to live when the countries and democracies of Europe can no longer be financed?

It is not the fact that capitalism is producing more with less labour that robs capitalism of its legitmacy; rather, it is the fact that capitalism is blocking the initiative to form a new contract with society. Whoever thinks about unemploy­ment today must not get confused by the old (German) catch phrases about the "secondary job market," the "part-time offensive," the so-called "versicherungsfrem- den Leistungen" (diverting taxes collected for unemploy­ment or social security to pay for other things) or about sick pay.

Instead one must ask: how is democracy possible without the security the labour society offers? What ap­pears as a decline and end needs to be turned into a period for new ideas and models that prepare the state, the eco­nomy and society for the 21st century.

In the antiquated world of the industrial society, two “em­ployers" dominated: capital and state. In the future, both of these will chronically fail in this function. Capitalism cre­ates unemployment and will become more and more unem­ployed itself. The word “empty" is, when applied to the public treasuries, actually a blasphemous understatement.

One can complain about it, or one can form a new center of activity and identification that revitalises the democratic way of life: through "public work." If "public" is the skill of drawing the stranger into a long-term discussion about his or her own affairs, then "public work" is the skill of turning these words into actions. What does this mean? Active compassion, for example, by those who call them­selves the "exhaust apes," "eco-brooms" or the "dead cans."

But it is not just their fear of destruction and decay that urges them on; it is more their anger about the fact that most people do not think about what they do. This active opposition to indifference has many objectives and faces: work with the elderly and the handicapped, the homeless and AIDS patients, illiterates and the excluded, halfway houses for women, Greenpeace, Amnesty Inter­national, etc. In this sense, "public work" combines politics, care for others and everyday cooperation.

There is also constructive criticism: many lawyers, tax con­sultants, doctors, managers, administrators, etc. want to apply their professional expertise to new areas - to influ­ence public opinion and legislation, to develop economic plans for self-help groups, to inform about tax flight, to consult debtors, to expose hidden dangers, etc. Why not reward civil resistance with prizes and distinctions? (How­ever, one should entrust citizens with the awarding.)

Active democracy is yet another form of "public work." Citizen participation, decentralisation - a small cultural revolution has broken out within many city and township administrations. It is promising not only more economic efficiency but also additional democracy. "Only branch par­liaments are being created by this type of citizen activity," grumbles a councilman.

This means: we must invest in the civil society. We must delegate it power and authority in every sense: technolo­gical (media), economic (basic financing) and educational (certificates that are accepted on the job market).

How do the values and goals of the "labour society" and those of a "socially organised civil society" relate to one another? Not in the sense of "either/or" but rather "as well as.” Decisive for the future may well be the inter­mixing of formal work and self-determined voluntary work, the dismantling of legal and mobility barriers between both sectors and the creation of possiblities to opt out or to transfer (at yearly, weekly or monthly intervals).

This would bring two different results: first, the monopoly would be broken that sees only gainful employment as a purposeful and acceptable public task. Second, public work would create new political fields of action and identity cen­ters within a fragmented society and at the same time would help prevent further fragmentation. The (material and cultural) rudiments for a "solidarity of individuals", like this country has historically never known, would evolve. And this in a country where not long ago one could hear the slogan “You are nothing, your nation (your class) is everything!".

This model is not about replacing paid work with unpaid work, as is suggested again and again. Those types of mo­dels remain under the spell of the labour society. That is not thought through well: that which shall take the place of work is work (housework, family, etc.).

There is, however, one important distinction, which Hannah Arendt raised years ago. She compares work, whose goals and products leave no traces behind because they are used up in everyday consumption, to actions that bring history to mind and that, in cooperation with others, bring about consciousness and political institutions. Hence, the age of disintegration must - as Alexis de Tocqueville no­ticed more than 150 years ago - be combated not through less, but rather through more political liberties. Political liberties in a post-traditional society bring about social con­sciousness and unity. Four arguments should sharpen these thoughts that appear devastatingly beautiful at first glance and help bring them in sync with reality.

First: is not this explanation already frustrated by the egoism to which this society has succumbed? Second, who is to pay for this? Third, is this at all possible under the dictates of a global economy? Fourth, does not „creative unemployment" (Ivan lllich) make one unhappy? Is not human identity ultimately shattered by the loss of gainful employment?

And what about the much-bemoaned "ego society?" The American sociologist Robert Wuthnow shows, that with­out voluntary commitment to others, all modern societies would collapse immediately. Eighty million Americans - 45 per cent of those over 18 years of age - do over five hours of volunteer work week for week. The monetary value of these services amounts to approximately 150 bil­lion dollars a year.

At the same time, this study show that 75 per cent of the American population rank solidarity, readiness to help and an interest in public welfare at the same prominent level as self-realisation, professional success and the expansion of personal freedoms. An “ego society" requires that those things which should be united be mutually exclusive: self- realisation and being there for others.

Only those who falsely equate commitment with member­ship in organisations can believe that this is any different in Germany. While the youth of today is staying away from the church, political parties, unions and associations (the average age of the members of the British Conserva­tive Party is over 60 years of age), various initiatives are experiencing a surge in popularity.

The same teenagers that avoid the boredom of collective organisations are active in saving the damaged environment (over 80 per cent). 73 per cent see homelessness as a main problem and want to do something about it; 71 per cent demand more rights for the handicapped, 71 per cent have a positive attitude towards feminism and believe it is an important issue for both men and women.

The "loss of values and the indifference of today's youth" - which, by the way, even Plato denounced - is motivated by the "commitment blockade." Rights are granted to young people, but as soon as they go to apply them, these rights are cut back. Increasingly, the government is clamping down on citizen action groups. Power is not really being delegated. This is what is meant by "commitment block­ade:" many are not active because they have experienced “that nothing comes of it.

Who should finance the investment in "social capital" in an active society? In Germany, we have over four billion German" marks in the accounts of private households - very unevenly distributed. Ten per cent of the households own a little less than 49 per cent of private capital, 40 per cent of households another 49 per cent, compared to 50 per cent of households with only a little over 2.4 per cent of private capital.

Entrepreneurs have discovered the key to wealth. The new magic formula says: capitalism without labour plus capital­ism without taxes. The returns from the profit tax for cor­porations dropped by 18.6 per cent from 1989 to 1993. The share of this tax in total government tax revenue was almost half of that (from 6.4 to 3.7 per cent), while at the same time, profits increased by more than 10 per cent. This is where the new globalisation power game comes into play. Many entrepreneurs are becoming virtual tax payers.

Capital is globally mobile. Countries, on the other hand, are bound territorially. Because the same products, which are broken down into different production phases, are manufactured in different countries and on different con­tinents, localising profits is becoming more dubious and at the same time opens up chances for corporate strategies to minimise tax payments.

The internationalisation of production offers businesses two strategic advantages: a global competition between expensive and cheap labour is created and a country's tax regulations and tax inspectors can be used against one another and circumvented. With this new power that businesses have, one sees the successful transfer of the laws of free-enterprise to the political sector.

In truth, the situation is very tricky. The claims of a number of commu­nal services (expensive universities, hospitals, transportation systems, the administration of justice, research funds) is no longer bound to the place of taxation. Thus many busines­ses are able to minimise their tax burden while at the same time moving to the countries that offer the best infrastruc­ture.

The places of investment, production, tax collection and living can be separated from one another. Many businesses are taking advantage of the low tax rates in poorer coun­tries and are enjoying the high stardard of living in the richer countries. They pay taxes where it is cheapest and they live where it is most beautiful. They ride on the coat­tails of expensive infrastructure services.

There is considerable potential for social conflict in this.

On the one hand, contrasts between virtual and actual tax payers arise (people who are still employed, small busines­ses who do not have this new mobility at their disposal and are within reach of the conventional tax authorities). These are the "dumb ones," the global losers.

On the other hand, the gladiators of economic growth, that are wooed by politicians, undermine the authority of the state by claiming its services but withholding taxes from it. The new virtuosi of virtual taxes undermine in a

legal but illigitimate way public welfare, politics and the state. The neoliberal political situation that swears by the market resembles, in this respect, the suicidal irony of an efficiency expert that is simultaneously preparing for and executing his own discharge.

There is only one consequence in this: the taboo must be removed from this geyser of social injustice and, moreover, in the very own interests of politics itself, it needs to be­come a part of public debate. The globalisation winners must be made to commit to public welfare once again. In many respects, the system of social welfare needs to be reformed. The conclusion from this means, paradoxically: not less, but more money, but this money must be correct­ly invested and distributed! For investments in public work this means: less produces more. Society begins to flourish; public wealth increases.

Clearly, we need a new definition for "wealth." This defi­nition must include, among other things, social sharing, political liberty, etc., because a society whose economy is flourishing, but for that reason causes people to lose their jobs and isolates them, is not a "rich" society; rather, it is merely a society left over for the rich.

And now comes the crux of the matter: who should pay for this? Consider four examples.

•  The tax relief model: those active in public work get to pay (considerably) less taxes (similar to how one, today, can deduct charitable contributions or how non-profit associations receive an exemption from taxes). Objection: this model assumes that volunteers have a regular job. Those who earn well anyway would have the opportunity to make their lives more diverse through public action.

•  A tax-financed fundamental safeguard: in this case, those who are active in self-determined voluntary work would receive a kind of "public grant" (like that which is already being attempted in Saxony).

"The choice between unemployment and participation in the civil society" model: according to which, the unem­ployed would have a new option in the future. They could decide if they want to remain unemployed or if they want to become active in a self-determined voluntary social or­ganisation.

This model offers surprises. If thought through, it could lead to the abolishment of unemployment: Rather than creating new (part-time) work, a self-determined, so­cially organised society would not only come to life, but would become a way of life.

  

• If the "American model" ends up as a combination be­tween full employment and the working poor, than the "German (European) model" could aim at a combination of gainful employment and a monetarily rewarded parti­cipation in civil society. Those who are active in social ser­vice are no longer "available on the job market" and in this sense are no longer unemployed. They are active citi­zens that are commited to human welfare and receive a fundamental safeguard (fora limited period of time).

•  "The tax-financed citizen money for everyone" model; the amount of money will have to be disputed over. Many are afraid that this kind of fundamental safeguard would promote the exclusion of already threatened groups - wom­en, the poor, the handicapped - from employment and society. Therefore it would be very important not to pay citizen money unconditionally, but rather to couple it with recipients' active participation in an inclusive society.

Can a single country alone begin with such a fundamental reform? If the basic diagnosis stated here is correct - that capitalism causes unemployment and will become unem­ployed itself - than the issue is about a global challenge that all highly developed societies will be facing sooner or later. However, in the long run, the country that finds a practical solution to this problem first, and hence confronts the threat to democracy, will, in every respect (also eco­nomically) be one step ahead.

After all, as far as the alleged identity monoply of gainful employment is concerned, studies today are already showing a fundamental change in attitude: more and more people are looking for both, to be active in and outside of work. Without a doubt, this can generate identity and social solidarity if the value of social service is upgraded socially, rewarded and made compatible with gainful em­ployment.

This outlined scenario comes down to a final plea: the in­visible practice of social self-help and political, self-deter­mined social organisation must be made visible. It needs to receive economic, organisational and political weight. This will only be possible if we invest in civil society and in the process of democratising democracy. What we need is a citizen/government alliance for civil society and, if need be, against labour and capital. But this alliance should in­clude everybody to whom democracy is dear.

1996