The European Social Model – Chimera or Core of the EU?
Nearly finished the contribution I had been asked to write for a book – it emerges from the work of the scientific council of Attac. And I guess I know now very well what to say when giving the presentation in Cork next month – a follow up from last year’s Poverty Summer School at UCC.
The really relevant part for me, i.e. my own thinking is that the article will help to clearly spell out the myth of the “old welfare state”, thus allowing to clarify the foundation for a fundamental “revolutionary” form that is established on the objective development rather than the hope for a voluntarist to approach towards a renaissance of overcome model. Still, though we truly will need a revolutionary approach we face even within the capitalist framework a rather radical overhaul of thinking when it comes to social policy.
The “welfare state” is as such a not only a multifaceted mechanism, but also historically differentiated, specifically responding to the different phases of the capitalist process of generating value – I approached this issue on the earlier occasion of a presentation in Mikkeli, Finland.
The challenge of any social policy discussion is surely to protect the baby while handling the bathing water. And so it is especially the left that is challenged to “protect” the achievements of what is called welfare state while the more or less general austerity policies are the driving force of the political mainstream. To be clear (i) there had been huge improvements of the living conditions in the widest sense if we look at the secular development; (ii) it has to be equally clear that at this stage we have to search for clear means to simply protect against “system(at)ic rollbacks”.
Nevertheless, we have to be analytically clear about both, the severity of changes and also the actual reason and causes of these changes. As well known from Marx’ studies, the individual capitalist represents the class interest rather than reflecting individual morality. In this light much of the critique – also from positions that claim to fundamentally reject the current structures – are an expression of good will, but also an expression of mal-information. On of the recent examples of such short-sighted approaches had been the official address given by the president of Ireland, Michael D. Higgins, to the European Parliament. Sure we may easily agree at first glance with his statement:
They (i.e. “our citizens in Europe”) feel that in general terms the economic narrative of recent years has been driven by dry technical concerns; for example, by calculations that are abstract and not drawn from real problems, geared primarily by a consideration of the impact of such measures on speculative markets, rather than driven by sufficient compassion and empathy with the predicament of European citizens who are members of a union, and for whom all of the resources of Europe’s capacity, political, social, economic and intellectual might have been drawn on, driven by the binding moral spirit of a union.
But as nice as all this sounds, it fundamentally underestimates the “compassion and empathy” of those “technicians” who actually use the guise of technicity to establish a strict rule of something that may even be called a “capitalist tributary world system”.
Austerity is not a moral, ethical retardation of individuals or “groups of individuals” that has to be and can be countered by moral appeals. Strictly speaking, austerity policy is then not an exception but a consequent expression of one of the two souls that characterise capitalism gaining dominance: To the extent and as long as capitalism – made possible by the technical development of the productive forces and expressed by a specific mode of production – could perform reasonably well in terms of production of wealth and could make profit based on the realisation-side of the overall economic process (distribution and exchange, in short linked to an understanding of wages as purchase power), social policy could be grasped by concepts as “productive social policy”, allowing to ask for the Costs of Non-Social Policy, as Didier Fouarge did 2003 in his Report for the European Commission’s Employment and Social Affairs DG.
However, this had been linked to a very specific constellation. Historically such constellations had been given nationally, leading to different development of national welfare regimes – this had been outlined earlier with reference to the Mikkeli-presentation. Although it had been left out of consideration on the occasion of that presentation, each of these distinct national systems had not least been part of a process of international re-ordering.
The thesis is that we find some similar pattern of European social policy development: in short: from a non-social policy with some marginalised measures towards a productivist social policy considering the costs of not having social policy and finally arriving at a new stage: not least (though not only)
- under the pressure of changing international constellations (EUrope in the world) and
- the changing also technical development of the productive forces, reserves for generating profit from a favourable pattern of distribution had been eroded.
This means (a) now profit has to be generated from production rather than in the sphere of realisation; (b) competition is now increasingly a matter of crowding out, not of performance, as it had been earlier the case (s. e.g. Zinn, Karl Georg, 2006: Mit Keynes zu einer „anderen Wirtschaft“. Zur Langfristperspektive keynesianischer Ökonomie; Beitrag zum Workshop “Keynesianische Ökonomie als alternative Ökonomie?” der Rosa Luxemburg-Stiftung (Berlin, 24.-26.2.2006: 18); (c) political power – not least with its arbitariness – regains meaning and reminds fereqently of feudal structures (see e.g. Herrmann, Peter, 2012; in: NewPrincedoms …) and (d) though global centre-periphery structures remain meanigful, we find at the same time and increasingly processes of peripherialisation within the centres.
And it exactly this constellation that leads to austerity policies: we should be well aware of the obvious meaning of privatisation here: it is about “de-socialisation” which is a matter of shifting responsibility back to the “complete individual”, or as we titled it is about Pure Individualism (s. Claire Dorrity: Critique of Pure Individualism; in: Dorrity, Claire/Herrmann, Peter [eds.]: Social Professional Activity – The Search for a Minimum Common Denominator in Difference; New York: Nova Science, 2009). It’s critique needs to take the economic dimension into account that obliges us to recognise that the European Social Model actually only existed as an expression of voluntarism which had been celebrated and maintained as long as it had been profitable. As soon as profit can only be gained from production in the strict sense, or in other words: as soon as the profitability of realisation comes to an end, we find a shift in social policy terms, the trinity of
- harsh exploitation and
- orientation on “social investment”.
But what can the latter mean under these conditions of pure individualism? It means that we come now definitely to the point of an ultimate Critique of Practical Reason: the individual “invests him/herself” – and ironically this is celebrated by the bourgeois press as success of creativity. And although all this is surely not the complete story, it is a major chapter in the book that opens in front of us: self-exploitation, precarity, neglect of long-term personal health in the hope of short-term survival.
Europe – Quo Vadis?
We all know the story, Peter asking Jesus Quo vadis? – The supposed answer had been Romam vado iterum crucifigi.
Europe is on the best way to crucify itself – but not by taking the route Beyond GDP serious. Instead, I crucifies itself by being too serious about the self-set strategic goal, spelled out in Lisbon:
And Europe crucifies those who dare to oppose or at least do not submit themselves: academics, political activists and those who fall through the loops of the increasingly fragile net.
Much more could be said – and it will be said in the book contribution, on occasion of the Cork event and in a forthcoming article in Social Inclusion
Background notes for the EuroMemo conference 2012 in Poznan
In the discussion of growth we face some fundamental problems, emerging from principle tensions.
* We are living in a capitalist system which is ultimate point of reference and its functioning basic condition when it comes today to searching security and improvement of living conditions.
* However, exactly this ‘productive order’ is for many of us questionable – one of the reasons that is at this point of special relevance is the structural limitation of a one-sided understanding of the goal: it is the concern with living conditions in a limited, individualised understanding, not allowing a wider understanding of social conditions of life. Perhaps we should go a step further by simply speaking of social life itself.
* Accumulation is against this background a double-edged sword: on the one hand it is a ‘structural condition and goal’ of the capitalist order;
* on the other hand, however, it is the permanent accumulation that causes a move away from the actual process of production although it remains depending on production as ultimate condition.
* Development and growth finds within this system its primary goal in the means of production as means of accumulation – independent of the meaning for the life of producers (working and living conditions). As such, accumulation becomes an empty shell, having lost all substance. Most visible signs are the process by which the different elements of the overall productive process, in particular the emergence of a seemingly independent financial sector are gaining independence from each other; and the disentanglement of productive processes out of the ‘core economic process’ (housework, DIY, SLEA …)
* However, as consequence of this depletion
[t]his type of development of productivity necessarily approaches a limit. This is reached when the expenditure in past labour wholly compensates economy of living labour and the overall productivity of the system ceases to progress. The resulting evolution of productive forces leads to overdevelopment of the material means used, reduction in living labour and increased unemployment.
(Fontvieille, Louis: 1992: Rate of Profit and its Determining Factors; in: New Findings in Long-Wave Research; Kleinknecht, A./Mandel, E./Wallerstein, I. (eds.); New York: St. Martins Press: 203-224; here: 219 f.)
Both aspects culminate in one aspect that has to be added to the statement in the quotation: This reduction in living labour is to some extent real; however, at the same time it is only shifting living labour into external spheres, thus not least reducing the labour costs while the value of price of the labour force remains unchanged.
This constellation poses a fundamental challenge which can be put forward by the following outline:
1 It has to be analysed if capitalism has predominantly sufficient resources for reaching a new level of self-regulation and -stabilisation or if such ‘inner-capitalist development’ is unlikely (see: Mandel, Ernest, 1992: The International Debate on Long Waves; in: ibid.: 316-338; here: 332).
2 A ‘non-capitalist perspective’, however, does not necessarily mean a socialist perspective – on another occasion I sketched some issues of a possible re-feudalisation (Herrmann, Peter, 2010: Encore Citizenship – Revisiting or Redefining?; in: Herrmann, Peter, ed.: World’s New Princedoms Critical Remarks on Claimed Alternatives by New Life; Amsterdam: Rozenberg Publishers: 17-75). And I think (or should I say: I am afraid) that this needs further elaboration. On the other hand, we should follow strictly the proposal put forward by Ernst Bloch who speaks
of four different kinds of possibilities, allowing us with this an informed approach to understanding them in their objectivity. He points on (i) the formally possible – what is possible according to its logical structure; (ii) the objectively possible – possible being based on assumptions on the ground of epistemologically based knowledge; (iii) the objectively possible – possible as it follows from the options inherently given by the object; (iv) and the objectively real possible – possible by following the latency and tendency which is inherent in its elementary form.
(Herrmann, Peter, 2010: Human Rights, Health and Social Quality – Realisations and Realities; in: Laurinkari, Juhani (Ed.) Health, Wellness and Social Policy. Essays in honour of Guy Bäckman; Bremen: Europaeischer Hochschulverlag; with reference to Bloch, Ernst, 1959: Prinzip Hoffnung; Frankfurt/M: Suhrkamp [written in 1938-1947; reviewed 1953 and 1959]: 258-288)
3 Looking then at growth, it seems to be more appropriate to look at development rather than maintaining the orientation on growth. It is unlikely that the latter allows capturing qualitative moments rather than limiting matters on quantified aggregations. Not least important is the fact that elaborating an understanding of development requires inevitably to outline a systemic understanding of what we re actually talking about – as such we are very much offering a positive contribution to the various debates around ‘Going Beyond GDP’. Furthermore, it allows a qualified critique of ‘New Green Deal’ arguments.
It should be noted with special interest that we find in the literature presentations that do not even consider the need of defining growth. It appears as a ‘given fiat’, something that does not need any definition or conceptualisation, let alone questioning. Furthermore, it is light-heartedly confused with development. Looking for instance at the work on the Diversity of Growth (McMahon, Gary/Esfahani, Hadi Salehi/Suire, Lyn [eds.], 2009: Diversity in Economic Growth. Global Insights and Explanations; Cheltenham: Edward Elgar), we see a striking divergence of the lack of conceptualisation of growth and the eagerness towards a differentiated analysis of the conditions of growth.
In particular with reference to IV j it is suggested to see growth as an in principle static concept. The main orientation is on a ‘soft-landing’ (Mandel), i.e. the maintenance of the accumulation for its own sake. We may see the historical patterns of inner-capitalist development as characterised by the well-known cyclical patterns of three overlapping moments:
- business cycles – reflecting supply and demand
- conjunctural cycles – reflecting the aggregate fluctuation as reflection of capacities (and the move between departments and sectors), and
- major cycles – as matter of major changes of the framework for and basis of accumulation.
Although we are concerned with far-reaching changes, they are only a matter of changes of the capitalist accumulation regime itself. Consequently they do not question the capitalist character of accumulation itself. In other words, the main point of reference is profitability of capital, and with this the rate of profit. Again in other words, the dynamic as presented with these different modes of business, conjunctural and major cycles is nothing else than the capitalist mechanism to counteract the tendency of the profit rate to fall.
This requires to look for a more differentiated view on accumulation regimes. As reference, Lipietz’ definition is helpful, seeing
the regime of accumulation [as] stabilization over a long period of the allocation of the net product between consumption and accumulation’ which ‘implies some correspondence between the transformation of both the conditions of production and the conditions of the reproduction of wage earners.
(Lipietz, Alain, 1986: New Tendencies in the International Division of Labor: Regimes of Accumulation and Modes of Regulation; in: Scott/Allen J./Storper, Michael [eds.]: Production, Work, Territory. The Geographical Anatomy of Industrial Capitalism; Boston/London/Sidney: Allen&Unwin: 16-40; here: 19)
1 Crises are well-known as points of change – and we can specify: changes are not only but as well very much concerned with changes of the accumulation regime. The French theory of regulation (Aglietta et altera) refers fundamentally to only two different regimes, namely the Fordist and the Post-Fordist regime. This is in the present author’s view extremely limited, being based on a limited understanding of capitalism and thus failing to realise a much wider potential of the analysis.
A hint for a wider understanding can be taken from the following presentation:
As capital accumulation becomes more intensive capital tends to become more concentrated , and the relative power of capital vis-à-vis labour … is changing. All this is occurring while the forms of competition, and therefore the industrial and financial structures, evolve. This is the history of contemporary capitalism. The ‘passage’ from a relatively competitive capitalism to one that is often called ‘monopolistic’ took place essentially during the ‘Great Depression’ at the end of the nineteenth century for reasons that were not only economic (economies of scale, market power) but even more social (the centralisation of capital is also the centralisation of capital is also the centralisation of labour, a process intended to heighten the possibility of social control given the rise to trade unionism). ‘Monopoly’ capitalism is thus the product of a stressful long-wave downturn, in which economic conflicts criss-cross with social and political conflicts, and as a result of which a new socio-economic paradigm is put in place.
(Dockès, Pierre/Rosier, Bernard, 1992: Long Waves. The Dialectic of Innovation and Conflict; in: New Findings …; op.cit.: 301-315; here: 309)
2 Tentatively, the following dimensions may be suggested as reference points for a differentiated view on accumulation regimes:
a capital intensity
b (raw-)material dependency
c labour intensity
d indigeneity/international dependencye relative strength of department I, II, and III respectivelyf class relations and regulatory mechanisms
3 Again only tentative, the following regimes are proposed:
a merchant capitalism/industrialising
b early industrialist capitalism
d state monopolist capitalism
e service-regulationist capitalism
f post-Fordist capitalism
g ‘supra-national state-monopoly capitalism’ (Thomas Kuczynski)
This is surely not an exhaustive classification. One point that springs immediately to mind is concerned with the usefulness of a separate monopolist stage.
4 The perspectives presented under 2 and 3 can now be combined by transferring them into a matrix.
relative strength of department I, II, and III respectively
class relations and regulatory mechanisms
early industrialist capitalism
state monopolist capitalism
‘supra-national state-monopoly capitalism’
5 It can now be asked if accumulation is actually also an issue in non-capitalist, here: socialist formations. If we give an affirmative answer we are required to reconceptualise both, the understanding of accumulation and of accumulation regimes. The ultimate point of reference has to be clearly defined by the genuine orientation of an immediate link between human practice (as [re-]production of and in everyday’s life] and the economic process. The mediation based in the capitalist form of commodities must be overcome. Paul Boccara contends for the capitalist formation that
[r]egulation concerns the inciting of progress in material productive forces (and in labour productivity) and the fighting of obstacles to such progress.
(Boccara, Paul, 1973: Etudes sur le capitalisme monopoliste d’Etat, sa crise et son issue ; Paris : Editions Sociales; qouted in Fonvieille, Louis, 1992: Rate of Profite and its Determining Factors; in: New Findings …; op.cit.: 203-224; here: 204)
Under non-capitalist conditions this should be translated into a concern with the means needed for (re-)producing and improving everyday’s life. ‘The economy’ is now decisively only a means to an end which can be considered as ‘external’, an annex in which social practice finds one and only one expression, as far as it is concerned with the production of the social itself. In actual fact it is more precise to see here the true socialisation of production, i.e. the emphasis of the social character of production.
6 From here we can return to the question of growth as part of development. The two main lines are about growth in capitalist societies and in non-capitalist formations.
Within capitalist societies we have the different contexts in which growth has to be seen: as cyclical movement aiming on short-term equilibration and as cyclical movement creating new areas fro accumulation after principle breaks in socio-technical respects. A first useful reference can be drawn from Menshikov’s view on ‘overall capital’, i.e.
not only capital materialised in new production equipment and research facilities, but also capital embodied in the whole new economic structure. This includes:
1. New industries and plants which are built in the course of the technological revolution;
2. Capital invested in producing new products – producing equipment, consumer and producer goods, new materials and types of energy;
3. Capital invested in new infrastructure installed to serve new industries;
4. Capital invested in creating new kinds of business organisation;
5. Capital in new government institutions and activities which are set up or expanded to support the new economic structure.
(Menshikov, Stanislav, 1992: The Long Wave as Endogenous Mechanism; in: New Findings …; op.cit.: 233-256; here: 246)
Important is also to investigate thoroughly the many parts of the overall actual social and societal production that are not commonly part of the GDP-calculations. Exploring this in detail requires a major empirical effort – even if we take an approach simply to growth as accumulation of capital, we have to consider its multifaceted character by way of itemising the existing GDP and those parts that are systematically left out.
This is a commonly recognised problem, however the readiness to take up the challenge in an integrating way is by and large missing. A telling example is the work of the Commission on the Measurement of Economic Performance and Social Progress, chaired by Jospeh Stiglitz, Amartya Sen acting as chair-advisor and Jean-Paul Fitoussi acting as coordinator (see for the work and also for the report http://www.stiglitz-sen-fitoussi.fr – 25/12/2010 10:56 a.m.). Although they criticise the GDP for its limitations, they do not offer a sound solution. Instead we find a kind of crib: if a coherently consolidated (system of) indicators is not in sight, a solution is suggested by running three indicator sets in parallel, concerned with the ‘Classical GDP-Issues’, ‘Quality of Life’ and ‘Sustainable Development and Environment’. This may be seen as progress. But it may also be seen as locking up of disintegration. Such parallelisation misses that a sound elaboration of indicators depends on an integrated approach. Cost-benefit analysis, properly understood, cannot be sufficiently undertaken in a ‘treble-entry accounting’. Rather it has to search for a way that allows fully integrating the different factors rather than setting them side-by-side. The latter results in such paradoxes as the ‘positive value’ of work that is undertaken in order to repair environmental damage (and already the ‘positive value’ of activities that damage the environment); or taking another – typical – example is the loss of GDP-contribution by non-employment-based activities which may contribute to ‘Quality of Life’ or ‘Sustainable Development and Environment’. I discussed relevant issues already in an article on ‘Economic Performance, Social Progress and Social Quality’ (see Herrmann, Peter, 2012: Economic Performance, Social Progress and Social Quality; in: International Journal of Social Quality 2(1), Summer 2012; © Zhejiang University, European Foundation on Social Quality and Berghahn Journals: 43–57 doi:10.3167/IJSQ.2011.010204). Whereas I discussed on that occasion more the conceptual perspective in the light of the lack of a sound understanding of the ‘quality of life’, it is at present of interest to emphasise that we have to look even in an affirmative perspective at more or less simple mechanisms of cost-benefit analysis. The to main factors that are needed for such an analysis are
- the offset of private and societal costs/benefits and
- the inclusion of the time perspective.
There are no clear criteria for the length of the latter – for pragmatic reasons it is suggested to refer to one generation the substantial reasoning behind this is rather simple: it can suggest a span of sustainability which then is permanently perpetuated. The overlapping of generations means that under the condition of ‘one-generation-sustainability’ sustainability is secured in the long run.
It is of crucial importance that this is immediately linked to the value of labour power. This is a matter that needs much more exploration, not least as we have to look at both sides: the pressure on the value of labour power, the push in terms of covering the costs of the value of labour power (towards social benefits, ‘low cost provisions’ and ‘outlets’ but also the actual increase of the value of labour power as matter new groups as bearers of new qualifications etc. (see in this context Fontvieille; op.cit.: 210/12).
To some extent this opens also a connection between micro and macro-perspective. It is the contradiction – as requirement to permanently balance the profit rates, looking at the variable and the constant capital on the level of the enterprise level and the level of the macro-economy.
To clarify and gauge patterns of growth, the following questions will be useful as guideline.
1 What grows?
2 What is the purpose of this growth?
3 Who is the direct beneficiary?
Who is the indirect beneficiary? – Differentiated according to individuals, classes, society, state
4 What are the means of growth?
Differentiated according to different ‘factor inputs’ and kinds of capital/‘capital sections’
5 What are the costs of growth?
6 Who actually bears them?
Differentiated according to individuals, classes, society, state
Different capitalist forces and interests and the contradictions between different sections and fractions of the capital should not be neglected. They play a huge role not least in connection with the determination of the cost of labour and the question who actually pays them (see already the statement at the end of VI.)
 In part this can be explained by the origin of the research, namely Aglietta’s empirical study (Aglietta, Michel, 1976: A theory of capitalist regulation. London: Verso) which had been by its own claim limited.
 See already VI. 4
 The differentiation between society and state may be important as in several cases the state will be used as means of distribution or also as means of ‘real cover by societal’
 The differentiation between society and state may be important as in several cases the state will be used as means of distribution or also as means of ‘real cover by societal’
Take care of the pence and the pounds will take care of themselves…
– it may sound old-fashioned. But this day this claim gains another time some special relevance – on the occasion of making a small purchase. I am asked to pay 795 Hungarian Forint. I have only a 1,000 Forint note, hand it over and get 200 Forint back – another case of the oblique EUropean inflation – the first time I noticed it in Amsterdam, a couple of years ago … – it had been a beginning, sneaking … .
But a different question is that of the value of money – not by way of the theory of money or the theory of value.
Here it is more the sociological stance of money and the view on money as part of a process that links the economic process of material securisation with the process of identity building and belonging. It is about my little adventure with a Hungarian banking card. The work in Budapest is not really about money: although I get some money, I have to cover from this the expenses for travel and additional accommodation. In any case the funding body told me that they would not be in a position of paying the money into my existing account –
Unfortunately this is not possible, the financial policy of the [institute] does not allow for it. On the other hand it would also create extra administrative work on our side, e.g. I would have to ask for a Declaration from your University at the beginning of each month as to whether you are still working there (or already left Hungary) etc.
So. one of the first things I had to do in Budapest had been listed as:
Opening of an account.
Gyöngyi kindly helped me. I went to the branch where I would have to ask for opening the account – I mentioned the result already on another occasion, when quoting the mail to Gyöngyi.
Opening the account had been one problem only. It took from then about 2 weeks to obtain the card which had been sent to the office in the university. Although I would not say I finally held it proudly in my hands, it had been a nice feeling for a simple reason, namely having a nasty administrative issue out of the way. So I checked if the had been actually already money paid into the accounts, went later to an ATM to experience that my double-Dutch is rather good, however my simple Hungarian too limited to cope with the ATM. I cancelled by pressing the international standard: red button; and I went later to another machine, asking somebody standing in the vicinity if he could help. … To cut a long story short: it had been the end of the new and short partnership between me and the banking card. The little rectangular piece of plastic had been captured by the ATM, shortly later Eszter and Judith had been sorting things out with the bank: the card had been blocked, I would be notified within a fortnight …. – and after about three weeks silence I decided to ask in the same branch where I opened the account. The lady, after a quick check, told me – somewhat surprised why I am actually asking – that the card is of course there, however “there” would mean that it is in another branch.
You turn left, and walk for about … .
Which I do …, asking myself why I actually allow all these complications of life – why I don’t stick to one account, one address and probably – under condition of a standard job rather than working as new-age traveller – having a better income, more security. Why do we do it – in the meantime this I merges in y reflections with more and more people: Denisa – when we met the other day she made a bit the impression of being lost; Orham who seems to be torn between the old home country, the current challenges of politically hugely responsible work and the search for “something entirely different”; Alan, seemingly more on the road (which is: above the clouds) and nevertheless tightly involved in the somewhat local struggle for Kurdish interests; Rayen, the friend from the Mapuche, some would say fighting a parochial battle, knowing her she easily visible as globalist-anti-globalisation activist, altermondialist …. Why don’t we all stick to a quiet life, perhaps not simple, not easy – but at least predictable, conceivable? – I cross the street, see in ashore distance the fruit shop. My strain, my questioning is swapped by retrospections: the amazing fresh fruit: large, juicy, sweet and aromatic, the hassle and bustle of the streets I passed every morning and evening when working in Asia, the view across Warsaw when I had been jogging in the top floor of the hotel, in the same height as the huge watch of one of the Seven Sisters. And all this depending on the new reality: virtual money, magic holes in the walls of de-im-pressive buildings, … – the clash of realities while we appropriate reality and search, even construct, design our own one. – Though the real reality … – well, I finally get after some more hurdles I hold the baking card in may hands, thinking in a very sober way about the cost of it as I read about recently in the article Perche’ la moneta cartacea costa molto meno della moneta virtuale.
Coming back to the question of how much fits into a day … The last few minutes before I arrive at the university again – I am approached by somebody who asks for money. A young man – he looks like a beggar making his apprenticeship: He doesn’t look as if begging is actually his only and ultimate source of income …, not yet. Bitter poverty did not blemish his body to a degree of plainness that one comes frequently across – a final stage that doesn’t even allow thinking about play as matter of freedom … – no, he still looks even handsome, though a quick look into his eyes clearly reveals his move. Perhaps it is a move that started from not entering certain shops anymore, buying instead products under the new brand names: KiK TEXTILE DISCOUNT … ; obtaining food from the outlets for viands – the new ALDI-delicatessen where delicate refers not least to the real existence: a reference to a delicate, i.e. problematic life situation.
This needs some further reflection – the meaning of discounters, the outrageous profit-rates, going hand in hand with permanent “sales”, special “outlets” etc. and with all this a kind of “normalisation of lowering standards” is something that does not get sufficient attention in its meaning of the wider analysis of the changes of the mode of production. And this surely has to include on the one hand the change towards a consumerist mode of thinking – consumo ergo sum; and on the other hand it has to consider the issue of ‘social responsibility’, the discussion on fair trade, eco-responsibility etc. Not trusting in these approaches does not justify to push it uncritically out of sight.
Anyway, coming back to the young man mentioned before: as much as it is about him, we can now say that he may stand as well for current societies, their socio– and political economies: the development from – at least on the surface affluent entities, indulging in abundance – to entities hat are moving along the abyss of absolute pauperisation, notwithstanding the amassment of unbelievable wealth.
All this is surely the presentation of at least some pieces of a puzzle, standing behind a new mode of production that is emerging in front of our eyes. Tentatively we can characterise it in particular by a further shift and solidification within the overall composition of production towards exchange. Production itself – understood as manufacturing – is technologically to such an extent perfected, i.e. simplified and mechanised that we can indeed do more with less. The production, refinement, individualisation and change of goods is, we may use the term that describes part of the development, just a mouse click away. This is a development that is not new as such – new is the stage we reached in this respect and we may well speak of a quantum leap. However, this depends especially on the following moments:
(i) cheap labour in the periphery in connection with low cost of transport
(ii) the establishment of a periphery within the centre (reserve army, precarisation, low income.
In respect of both factors [(i) and (ii)] it is useful to return to what had been said earlier, towards to the end of the brief review of the airline magazine – on that occasion the Social Protection Floor had been mentioned. And it seems to be the ultimate solution. There is surely no reason at all to deny its utmost importance. The Report on the Social Protection Floor. For a Fair and Inclusive Globalization which had been already quoted before (Report of the Advisory Group Chaired by Michelle Bachelet: Social Protection Floor. For a Fair and Inclusive Globalization; convened by the ILO with the Collaboration of the WHO; Geneva: ILO, 2011) states:
The effectiveness of social protection floor-type measures in reducing poverty, containing inequality and sustaining equitable economic growth is already well acknowledged in developed countries (IILS, 2008).
(36, with reference to: IILS (International Institute for Labour Studies). 2008. World of Work Report 2008: Income inequalities in the age of financial globalization (ILO, Geneva)
Adding some flesh on the bones the authors continue:
In OECD countries, it is estimated that levels of poverty and inequality are approximately half of those that might be expected in the absence of such social provision. That said, poverty reduction in such countries reflects the combination of both social protection floor measures and more comprehensive forms of social security, as part of social protection systems. This gives impetus to the need for any country, having put in place measures representing a solid floor, to take the next step of developing the vertical dimension of extension.
(ibid.: 36 f.)
But the all this makes us easily overlook that this is the ultimate form and step not only of globalisation but also and even more of this very specific form of socialisation of the costs of this process.
(iii) the orientation on ‘reproduction’ in the sense of replication – the explicit imitation of designer ware being only an extreme tip of the iceberg;
(iv) the shift of the regulative system towards self-regulation of the corporate sector going hand in hand with the major process of financial redistribution. On the latter point I elaborated already on another occasion – with reference to Joerg Huffschmid:
Especially as reaction on the recent crisis much ink had been employed to highlight the boundless scope of this process – and also on providing an analysis of the various mechanisms behind these processes. And important discussions also concern ethical issues, personal responsibility and the reach of law to control these processes. In a lecture on the crisis of the finance market capitalism, Joerg Huffschmid elaborated on some basic economic problems, pointing on especially five points. These are outlined in the following:
* the divergence between finance capital and social product since 1980 – whereas the first multiplied by 16, the latter only by 5.5;
* the international character of the financial assets, i.e. their origin in another country than that of its current location which is a trend that can be found in developed and developing countries alike;
* the permanent redistribution of income from the bottom to the top from which a lack of purchasing power is the unavoidable consequence;
* the tendency to privatise the pension funds with the consequence of huge amounts of capital being held in private finance schemes rather than money being paid to the pensioners in PAYG-schemes;
* the liberalisation of capital movement which means that investment can be undertaken in any place which had been limited under the Bretton Woods system.
(see Herrmann, Peter, forthcoming: God, Rights, Law and a Good Society. Overcoming Religion and Moral as Social Policy Approach in a Godless and Amoral Society; Bremen/Oxford: EHV with reference to Huffschmid, Jörg, 2009: Presentation on occasion of the Seminar Theories of Capitalism [German language], April 2009, Vienna)
The fundamentally important point at present is that this redistribution is taking place between sectors but it is also strongly linked with the statutory regulative system. Having said this, we may nevertheless ask if and to which extent we should continue to speak of the state. If we are ready to accept that the state changed in very fundamental terms – and the modern state is not only gradually different in comparison to the previous statutory formation – we have to reconsider to apply a new analytical framework also in this respect. Not withstanding the important outlook already given by earlier works (e.g. Lenin, Hilferding, Gramsci, Boccara, Aglietta, Poulantzas), and notwithstanding the importance of recent work on cultural political economy, which provides insights that are also in the current context of major importance, there is in all of them an inherent tendency to remain within the realm of two traps. The first consists in the view of positioning the state as political entity outside of the economic realm, drawing the link by elaborating the steering function which is seen as power tool of the capitalist class. However, to the extent to which the notion of the ideal general capitalist, as outlined by Frederick Engels in his Anti-Duehring, is taken serious we see that the state is actually seen as an inherent part of capitalist accumulation, a specific moment and form of socialisation.
The second trap has to be seen in the view on the state as independent, purely political actor, if not coming near to the absolute idea as we find it in Hegel’s outlook, it is at least an instrument of pure reasoning, surely informed by power struggles and in this way again linked to the economic relations, but fundamentally political and a matter of discourses – the new Hegelian idea in the formula proposed by Habermas. – The difference is surely going beyond being gradual although the fundamental problem is the externalisation. Some of these flaws are surely simply a matter of the historical stage which provides the background of the research.
The most appropriate approaches and candidates that may serve as stepping stone for moving further are that by Paul Boccara and his early work on capitalisme monopoliste d’État and the perspective on the state offered by the école de la régulation, taking its point of departure from Michel Aglietta. Further important impulses can be taken from the Fernand Braudel and the École des Annales.
To develop the discussion in a more fundamental way further it is proposed to start from the issue of socialisation rather than a presumed institutional system of political regulation. This allows developing an overall systemic perspective which takes two intermingled forms of socialisation which is itself understood as process of relational appropriation. This allows not least to develop a clearer understanding of value as political- and socio-economic category. The general stance is fourfold, namely
- the reproduction of society
- for which a certain power-constellation is condition
- but which is then also – as aim in itself – ‘maintained’ by those who hold the power
- and opposed by those who are aiming on extended reproduction.
The latter, i.e. the extended is not just a quantitative question but more importantly a matter of a qualitative overthrow of the means and mode of production. This includes the re-determination of value. As such it is concerned with the following questions:
(i) what is considered as value, i.e. what is economically valuable;
(ii) in which way is the decision on ‘valuation’ actually taken;
(iii) in which way is this value defined as and divided into social value on the one hand and individual value on the other hand;
(iv) what can be said about the production of this value.
Important is to remember once again that production is a complex process consisting of the actual ‘manufacturing’ and distribution – of course consumption and exchange play also a role but do not have to be considered here. For the time being this may be sufficient as scaffold which will be on another occasion (see Herrmann, Peter, forthcoming: Social Policy – Production rather than Distribution; Oxford/Bremen: EHV) further developed – and which will surely need a longer and collective debate to be considered as steadfast concept.
Leaving the needed further work aside, the following aspects may be already presented with a broad brush.
First, with this development we find also new dimensions of socialisation and the revival of forms that played in history already distinct roles. The re-emergence of the co-operative sector and also the revival of the idea of the commons have to be mentioned. As naïve as much of the debate presents itself, it should not be reason to disregard the meaning of the overall processes.
Second, the role of political steering as part of the overall process is hugely contradictory – and has to be seen in immediate connection with the outlined process of the re-determination of value. Important are
- moments of authoritarian rule
- moments of ‘governance’ as real or suggested opening of structures of governing
- moments of ‘alternative’ and ‘self-governance’.
Third, the meaning of rights is fundamentally questioned – this is of course in some way simply a matter of established rights being questioned by the ruling class; not less important is however the shift in the understanding of rights themselves. If we accept that we are confronted with a process of socialisation, the individualist approach to rights and law is under pressure.
Another dimension to the rights-question has to be mentioned – and we can return to the questions which had been briefly tabled in connection with the social protection floor. In actual fact, much of the discussion carries some notion of mercy. At least the question of rights can only be tabled on a secondary stance. One point in this context is that a simple quest for legislative regulation may be important – but even if it is possible to find the readiness and ‘power’ for such regulation there remains a fundamental difficulty: the right to determine the own life, including the what and way of production. And with this, the availability of the needed “space”. Without elaborating this further, we should not forget that in several countries of the “developing world” fatal situations actually developed not least as consequence of the exploitation of their national and local resources (raw materials, human resources, “organisational” modes …). – It is at least another time useful to point out that it is not more than a frequently repeated illusion to work on a simple solution.
Fourth and finally all this has direct impact on the institutional mechanisms and is also directly expressed by changes of the system itself. As much as we are speaking of the statutory system we always have to think about the non-institutional system being direct or indirect part if it.
Parts of the development are still hidden, behind and within the old nets of the society that are slowly but surely dissolving, fading away and with which actually the entire society in the current form dissolves and reconstitutes. The social nets of communities, social insurances and social security systems do not exist anymore in their old form, employment – full time and permanent is already since some time for many an illusion – and nevertheless it is even today still as skeleton present, providing in it’s unplanned and tacit interaction at least for many still a framework within which they can perform without attracting attention. For many ….
For others, however, deep darkness marks their way. At the end of their way there is no light – as it is the case for the Scamp of the Village.
It looks as if they are coming out of the dark, a moving in the dark and their sturdy move towards as does not give us the feeling of being the lucky ones. Rather, they appear somewhat foreboding, threatening. Is it by accident that they point in this way towards some light: forcing themselves out of the dark – with exactly these sturdy steps. We can recognise a relatively small bright spell at the top, being lost in the narrowing dark channel and now opening again. We see on the right – on their right – a women that is approaching the men in an unexpected friendly way – more friendly then the people on the other side seem to allow. There we find hostility, scepticism, scornfulness and an expression of satisfaction. Poverty of this kind obviously lost its attraction, and facing it in this form it is not least a means of splitting society, making sure that the wheat is separated from the chaff. It is one part of the hegemonic schemes that are known since long; panem et circenses complemented by the divide et impera. Of course it may come to the mind of the reader that realism is here suggesting another form of renaissance: Though societies surely changed over time there are apparently some patterns that are rather common, crossing the boundaries of different formations. And if we go a step further – looking at the Munkácsy Mihály paintings we explored earlier and looking at the present – one we can make out another issue: this realism is very much about real life, the depiction of reality as it really is and as real people face it. And this is to some extent also true for the other painting mentioned before, Paál László’s Berzovai Utca. All these realist presentations are not really concerned with the reality of the productive sphere. Rather, the topic is more a matter of relationality: the positioning of the human existence in the general and overall circle of pure reproduction. In philosophy, existentialism began in the mid-19th century as a reaction against then increasing industrialist alienation, searching for the individual and his/her role not within this process (as had been more the concern for philosophers from the Hegelian and Kantian school), but outside of it: pure existence as reply to pure reason and the absolute idea.
Realism in fine arts – taking Munkácsy’s work as one not unimportant example – lagged behind but followed very much the same pathway. It found this kind of challenge emerging from reality only later stage, after philosophy dealt with it in different ways. And all this, as much as it had been a matter of realism and the engagement with reality as focus of attention, had been at the very same time distant from reality, only being interested in the very general question – paradoxically the loss of reality, the loss of control over reality in a generic way. But with this it still barely touched on the real reality of the productive process. And as more as real reality actually moved to an iron cage of industrialised capitalism and the bureaucratic domination, as more philosophy and arts felt compelled to look for meaning – very much like in today’s debates there is search for meaning, for values, for “fighting greed”. But right now, while writing, something else pops up which gives reality another dimension – the one faded out. Heike Buchter, in an article in the German Die Zeit, writes:
Seit dem Ende der Krise sind die Großbanken nur noch größer geworden. Besser als jede zusätzliche Regulierung wäre daher eine Zerschlagung der Kolosse. Dann könnte die Katastrophe auch beim nächsten Bankenfehler vermieden werden. Dass einer kommt, ist schon sicher.
(Since the end of the crisis the large banks only increased in seize. Better than any additional regulation would be to break up these colossus. Then the catastrophe following the next flaw of banking practice could be avoided.)
In short, the meaning cannot be found in the reality and how we interpret it. The meaning can only be found in the reality and how we change it.
Realism is like life – it doesn’t pretend pure beauty though we are occasionally lucky enough to encounter pure beauty: beauty as the purity of a face au naturel, as naturalness of a movement, as the chasteness of a smell.
Realism is like life, knowing a lot about what is going on. And if it is real realism it also knows that vulgarity is involved. However – if we thoroughly feel and live the Goetheian 3,000 years which had been mentioned on another occasion – we frequently have to ask ourselves what vulgarity actually could mean.
Is it the view on Caravaggio’s painting Madonna di Loreto?
If we follow Graham-Dixon, at least at the time when the painting had been made if had been seen as vulgar.
Perhaps the reason for this can be seen in the fact that we see in this picture the poor being put into the place of being meaningful? The acceptance of poverty as fate of meaningful people?
As such, Caravaggio’s work would mirror very well the Zeitgeist – and as frequently highlighted this is taken in very broad terms – in some way merging the late middle ages, renaissance and its reach into the enlightenment era.
We may remember Shakespeare’s words with which he positions people on the stage – and importantly, his notion of people: personalities that emerged at the time.
And we may take it as challenge: the poverty in history, at least in the way we see it depicted has frequently enough to offer to allow us an idealising, romanticising and idyllic outlook. At the time it had been – as in the case of the Madonna – seen as vulgar or – as in the case of Munkácsy a reasoning for meaning, a reasoning looking for an acceptable way to deal with reality: protestant ethic as Max Weber described it had been sufficient to some extent; but at the same time it did not do suffice to answer the seemingly secular question of pure existence, pure beauty and what is called today bounded reason, peeping around the corner where pure reason ridiculed itself under the famous Kantian umbrella which had been brought every day at the same time for a walk.
 A major reason for the weakness of the postmodernism discussion can be explained by the fact that it starts from the superstructure, if it takes economic factors into account it does so only by seeing them in a secondary instance.
 He writes:
And the modern state, again, is only the organisation that bourgeois society takes on in order to support the general external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists. The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital.
 This should include new forms of living together, exchange networks, care arrangements etc.