History after the End of History

By Friederike Habermann

[This article originally published in: CuS, Christ und Sozialist, 1997 is translated from the German on the World Wide Web, www.brsd.de. Friederike Habermann is an economist and journalist living in Hamburg.]

The “end of history” as Francis Fukuyama titled his book began after the collapse of the nominal socialist states. The idea flits around the world. Since socialism follows capitalism in traditional Marxist theory and then passes over to communism, the fact that socialist countries became capitalist again proves the final victory of the superior system.

Capitalism is also changed on account of this great upheaval. Through the collapse of the command socialist states, an ideological counter-model became unnecessary. Despite the forbidding reality in the command socialist countries, no one had to die of hunger or freeze to death. There were no unemployed persons. The legitimation pressure on the western model diminishes with the collapse of this counter-model. The adjective “social” before “market economy” fades. The tendencies inherent in capitalism become less bridled than in the past. “Goods” like housing or education are increasingly regulated by the market and thus unaffordable for more and more people. The exclusion of whole groups of the population occurs since they are not needed for the production- and consumption process. The French philosopher Pierre Bourdieu characterized these changes at the end of 1998 as follows: "We are presently witnessing a conservative revolution that revives the wild original capitalism in a new garment. What is peculiar in this revolution are its soft gentle hands. It acts as though it were apolitical.”

The capitalism of today calls itself neoliberal. What is neoliberalism?

Capital’s Freedom from Restriction

The freedom underlying the term “liberalism” is the freedom from any restriction on capital. The classical or neoclassical economic theory in its further development that is the basis of capitalism and liberalism only really functions when allocation – the distribution of all goods in the production- and consumption process maximizing well-being – is not hindered. Obstructions happen for example through cost structures (like minimum wages or rents), mobility restrictions (like tariffs or entrance restrictions for the “work-force factor”) and information restrictions. Only in theory can there be complete information about everything without any loss of time.

In his basic work “The Wealth of Nations” (1776), Adam Smith, the founder of classical theory, concluded that an “invisible hand” best orders all things by an automatic harmony when everyone only acts for his own advantage. Thus the individual pursuit of gain was not only just but a natural law command producing a self-regulating “natural order” – the complete freedom of transportation- and exchange relations – so that the private economic motor of increased productivity could be effective within the division of labor economy. Women and the work of women, at that time provision work and subsistence work, were and are not considered by the “homo oeconomicus”. Profits in the production process would be much more difficult if traditional women’s work were not completely undervalued. Thus washing dirty dishes out of love for the family was not questioned, even if this was done after the holiday.

In Das Kapital, Marx explained that prosperity was not “simply” based on the division of labor as Smith postulated. Rather the surplus value resulted from the exploitation of paid labor, from the fact that human labor creates more value than it costs. Thus the legitimacy of private appropriation was dubious. In his analysis, the structures of capital accumulation and concentration neutralizing competition were inherent to the capitalist process.

Not accidentally the classical economy in the 1870s, influenced by three different economists (Menger, Javons and Walras), emphasized the (neoclassical) marginal utility theory that starts from individual utility curves. The aggregate economic view largely disappeared from theory. Up to today Marx’s discussion of this model was avoided. The theory of surplus value was overshadowed.

The phase of liberalism in industrialized countries first started with the development of capitalism in the second half of the 19th century. At the beginning of the 20th century, the phase of Fordism began, named after the auto maker Henry Ford who – originally forced to raise wages by the refusal of workers to adjust to the assembly line stress – put into practice the ideas of Frederick Winslow Taylor on a large scale. Fordism reduced prices of products through assembly line manufacture and mass production with simultaneous reduction in working hours and increased wages. The factory owners were responsible for this. According to Ford, “the leisure and purchasing power” of workers first produce the sales market. Fordism and Taylorism originated on the basis of the changed social hierarchy of power. More workers were needed on account of the labor-intensive conditions of production. At the same time intense increases in production required a large circle of consumers.

John Maynard Keynes’ theory arose during the worldwide economic crisis in the twenties. An adequate income of a steady demand must be the foundation of economics, not only improving the conditions for capital. Keynes revised the classical theory of harmony and started from the assumption that there can also be a balance in underemployment within an economy. He considered a balance with full employment as a special case.

A relative prosperity of wide sections of the population occurred on account of these changes, through the exploitation of (former) colonies from which the whole population of the North profited and through the effort to maintain anti-communism. The phase of the welfare state began. That this lasted a long time was due to the Second World War. Arms production before the war and rebuilding after the war kept the system afloat.

At the end of the sixties, the welfare state came into crisis. New social movements appeared that criticized the system from the left. The first reaction to the crisis in the seventies was Keynesian, increased state intervention. However economic growth remained at a low level and unemployment climbed while public indebtedness rose through the increased state expenditures.

The change of policy occurred firstly and most clearly in a Latin American country: Chile. Pinochet followed Allende. Neoliberalism first prevailed in Chile in the most bloody way. Thatcherism, Reaganomics and Kohl followed. Thus the change occurred country after country in the West.

What is Neoliberalism?

Firstly concerning language, trimming the state sounds better than cutting positions and cancellation of public services. Health reform sounds better than cuts in benefits for the sick. Neoliberalism sounds better than capitalism.

Globalization, the theme all over the world, involves very new accents that characterize neoliberalism.

Neoliberalism is very protectionist although this seems at first a contradiction. The advantages of free trade are always cited so that other countries – above all the countries of the South – should open themselves, so the raw materials there can be exported cheaply, so goods can be imported free of tariffs and restrictions, so profitable state enterprises can be taken over and production can occur without annoying impositions like taxes, social security or environmental protection measures. Free trade cannot be emphasized with the introduction of externally produced goods (thus not necessary raw materials) into one’s own (industrial) country.

Blocks in the sense of EU, NAFTA, ASEAN and so forth are characteristic economic structures. These economic blocks strengthen the economic exchange so countries partly understand themselves as an economic unit within which there is a free flow and thus perfect competition of goods, money and people. Three centers form: the US, Japan and the European Union or Germany as the strongest state in the EU. Economic and political power interests are clearly interwoven here. Again and again trade wars are waged that contradict liberal trade. The exchange of goods outside these economic blocks is actually too trifling to mention. Five percent of the gross domestic product of the European Union occurs through exports. Thus the current understanding of globalization is largely unmasked as a myth.

If an internationalization of commodity capital happened after the Second World War that was complemented in the sixties and seventies by an internationalization of productive capital, financial capital is the element that characterizes globalization today. While world trade volumes tripled in the past quarter century, the currency volumes went up eightfold in the same time period. $1.3 trillion of financial capital moves daily.

Globalization is a myth where the “world market is a practical necessity”. If financial capital may be a timid deer, production capital is not. For decades, production investments were not made in other continents. The infrastructure, the education level, work discipline etc. is a precondition for most production. Wages don’t differ a few percentage points but many times over. Nevertheless only six percent of all German industrial foreign production falls to low-wage countries…

Dismantling and not developing the welfare state is a political solution. Enough money exists.

The national income in Germany has increased by a third since 1980. However the real income of dependent employees has not increased a single percentage point.

Since 1990, real income has even fallen 5 percent on the average while property income has risen almost 20 percent.

The lower half of the households in Germany have merely 6 percent of private assets while the top hundredth have twice as much.

For example in Hamburg, the richest city of Europe, every adult person has an income of almost 90,000 marks a year on the average. In reality, every tenth person lives from income support; with children almost every fifth. In the eighties the number of social security recipients more than doubled – while the income of millionaires rose almost five times.

For a long time, not all businesses have prospered. On the contrary, many smaller and medium-sized enterprises declare bankruptcy. This is often not because of a bad economic situation but on account of the internal European market. Large corporations prevail, take over the market shares of smaller corporations or incorporate them. Here are two examples:

In the food industry, the five largest suppliers now control three-fifths of the total market, the largest fifty have 97 percent.

A fifth of the profits, a sixth of employees and a third of production facilities come to the largest 100 corporations.

Increasing centralization also means concentration of power. The markets represent the lowest level of capital concentration. A business like Siemens gains three billion more profits from its financial investments than from production.

In Germany the positional debate defines public discussion today. Hardly anyone dares talk back. Wages and taxes are too high, it is said, to compete with one another and with so-called low-wage countries. Corporations in Germany must pay excessively high taxes. However nearly all large corporations post annual increased profits, often double digit. While corporations were burdened with 33.6 percent taxes in 1980 on the average, these taxes were only 18.3 percent in 1993. Here are two examples”

The profits of Deutsche Bank rose 77 percent from 1990 to 1993 while tax payments fell around 9 percent on account of profit transfers abroad.

In the same time period, Siemens increased its profit only around 4 percent but paid 71 percent less taxes.

While the “abuse of social benefits” is emphasized, there is astonishing silence about “tax flight”. This is all the more surprising since the extent of tax evasion is estimated at eight hundred times as great. These billions are missing from the state. The debt balance of public budgets at 2 trillion is more than two thirds of the gross national product. Last year a quarter of tax revenue of the country was spent for interests alone. The circle closes. The rich become richer.

Germany was never as rich as today. The gross domestic product produced in Germany is almost as great as France and Great Britain combined. The German trade volume is greater than the sum from the EU countries Spain, Portugal, Ireland, Denmark, Sweden, Finland, Luxemburg, Austria and Greece.

Despite all these restrictions, there is an intense competition among the (industrialized) “competitive states” for favorable production conditions. While production processes are constantly rationalized by the competitive pressure, services rise in price since these can only be very restrictedly replaced by machines. Public services through the state – like education, health care etc. – become relatively more expensive. However no alternative welfare systems are resolved like basic income, radical reductions in working time or promotion of autonomous structures.

What is happening is a long-term redistribution in favor of capital. This is not a temporary measure that guarantees a new increase in well-being by dismantling the welfare state.

Capitalism fails day after day

Is capitalism the superior system? Definitely in the Darwinian sense. Nevertheless capitalism fails day after day.

A system fails when it allows fifty thousand persons to die of hunger every day, half of them children. The Zapatistas protested because neoliberalism cannot satisfy their most elementary basic needs. Rather, neoliberalism through world market competition assures that their most elementary needs cannot be satisfied.

A system fails that designs war tactics for securing resources as explicitly declared in the NATO-Airland Battle concept. Armaments are sold to assure jobs and increase the gross domestic product. Better to dispatch soldiers than to let oil prices climb.

A system fails that allows several animal- and plant species to become extinct every day, that refuses to reduce CO2 emissions so there wont be floods in Bangladesh with hundreds of thousands of dead and represses the catastrophe.

Nature only needs to receive a price, it is now said. Then the problem will be solved in a free enterprise way. A ton of CO2 emissions for only 24.80 DM (Deutsche marks)!? Like all consumption, the present consumption of nature is rated highly in preferences. Who doesn’t prefer consuming a bar of chocolate or a glass of beer today instead of the Sunday after next? Ultimately consumer renunciation means practicing abstinence for future generations. But who knows, economic logic asks, whether future generations will still delight in walking in forests? Perhaps they will prefer surfing the Internet. Or they will find the scientific solutions for air renewal. Finally nuclear engineers argue that something will occur to the coming generations regarding the nuclear waste that will radiate for tens of thousands of years. Perhaps everyone will be radiated and forests will not be needed any more. All these statistical uncertainties lead to further drastic discounting of future consumption compared with possible present consumption. How beautifully logical is economic theory!

What counts is usability of nature… When a butterfly species dies out, that has no monetary effect on a business balance sheet or a gross domestic product. Who decides to take this into account and renounce on economic profits?

How is the price of nature determined? Surveys were conducted in Berlin on what people would be ready to pay for clean air. According to the results, they would pay very much. They would also pay very dearly for a quiet environment, green spaces, healthy food etc. Many persons would pay several times their income for such values. However they cannot since they must eat, dwell and live from the money. The consequence is what is already happening now. Whoever can afford it moves to residential areas with cleaner air, more greenery, less street noise and fewer beggars. The others find themselves left of the junction on the elastic supply-demand curve. The price for all this is prohibitive or unaffordable for them. From that point of view, nature is expensive to us.

Marx made very clear that it isn’t the spitefulness of the rulers that allows the system to function. Rather the system functions and the people in it. Conduct is not always economistically determined but is essentially defined by the economy. The entrepreneur acts rationally, that’s all. Food is destroyed because otherwise the price would be unprofitable. Environmental standards cannot be observed since the rivals also don’t observe them. Offices are built because one partly successful rental is more profitable than rental to the socially weak. Nothing more. Capitalism implies the banality of evil. Nothing more.

Cooperation

Capitalism breaks down in another area: cooperation. Competition makes us all into rivals. Nothing runs without competition, the oil that lubricates the system. This begins with the better toy, continues with grades and ends with the oak casket. Competition pervades our life more than we admit. While only a few consciously desire that the others should fail, this is the logical consequence since the failure of the others raises one’s own value. The whole consumer world is built upon having something better than the others. At the same time it means being able to buy self-confidence, superficially in any case.

In this area, capitalism proves again its amazing adaptability to needs or demand. Concerning emotion, if the smile of the salesperson once appeared somewhat mechanical and routine, emotional work today must seem personal and genuine. Complete identification with the products is expected. Whoever doesn’t radiate self-realization experienced through the job will be replaced by a better salesperson so customers buy the goods with a “genuine good feeling”. The “modern leadership personality” is also marked by such a communication style. However men pay dearly for their emotional work while this is expected of women as self-evident.

Exchangeable superficial relations are necessary since the mobility of workers (“young, dynamic, flexible”) is a prerequisite of a functioning economy. Whoever on account of social relations is not ready to exchange his life environment for a job is regarded as naïve or unrealistic. No measuring scale exists for longing. The life form of the small family proves to be an advantage. Every performance-oriented, dynamic individual needs secret areas where he or she doesn’t need to be adult and performance-oriented.

All this affects our bodies. Not only the supermen and women in advertising leave behind their effect. In a time when everything has to be functional and perfect, we also put this demand on our bodies. As the economic models collapse when they don’t submit to the perfect ideal assumptions, everything that deviates individually from the ideal easily appears disturbing to us. Barbie mannequins could be personified curves of economic models, exchangeable through the perfection. Everything individual would represent a mistake.

The spirit of capitalism penetrates all the corners of our life. The utility theory shows this. A person is selfless when the benefits from increased self-contentment or increased acknowledgment are regarded as higher than the missed advantages. This train of thought is right. but dangerous. The homo oeconomicus, the person always acting rationally and maximizing advantage, has an effect on us as an ideal and isn’t only a standard for analyzing our conduct. “Maximizing advantage” is usually understood in a very abridged way as pursuit of gain (or profit) – for money or to be better than others, not for the happiness of love, solidarity, community and other beautiful things. Thus experiments among students of economics and sociology show that students of economics to whom maximizing advantage is constantly ingrained as the only rational possible conduct act comparatively more egotistically.

People in our society are owners of goods. A distance, foreignness and isolation or insulation are implicit and encourage fear. Where human solidarity is torn by commodity relations, sympathy and love are stylized as “purchasable” values “earned” through certain ways of acting, literally through a character mask. However where love and sympathy must first be earned, there is a constant fear of loss of love and the constant threat by a demanding environment.

Economic conditions are experienced as an outward power defining us that we never entirely escape. We do not influence conditions of production; these conditions influence us. We are entirely determined to earn our livelihood (even by having a constant battle with the social welfare office). Social status is connected with that effort. Happiness is measured by the amount of income and vocational position.

What is revolutionary in the struggle of the Zapatistas is that they consciously break with the hegemony of material values and set the dignity of people and community between people in first place. We have all felt this “Ya basta” (enough) in our interior – when we are mobbed, when we feel overwhelmed by the pressure to perform, when we have the feeling of only having a right to exist when we are productive. “Neoliberalism sets the ability to buy and sell as a fee for being a person”, says Marcos. I am productive, therefore I am.

The Zapatistas do not promise any heaven after a revolution. They struggle for a better world but begin in the here and now to improve their world, for example by making decisions collectively. Obviously they are not angels fallen from heaven. This is very clear in their grappling with the feminist claim. Many things are in development with them. They are still miles away from what European feminists regard as emancipated… Traditional values are assailed. The danger exists that the male heroes of the struggle could be derided as culprits and crude beginners.

Questioning Together

That the left has an answer to everything is offensive to people, Bert Brecht once said. Perhaps the lack of answers prevailing within the left today is a chance. Wherever a group of people think they have found the answer, they will attempt to implement this answer. Power is necessary for implementation.

The formula that it is necessary to seize power to change the world should not be repeated… Rather what is central is creating a world, not as power wants it and not as we want it, but a world in which many worlds fit, as many worlds as necessary so every man and every woman can lead a life in dignity and everyone can live their own concept of dignity. If we don’t try to turn the old weary wheel of history, we will arrive where we began.

Where we have no answers, we must seek for answers collectively and together. Why are we unsure that billions of “human capital”, billions of people, could create a world not at the expense “of others” – other people, other nations, other continents and other beings like plants and animals?

Capitalism is doing very well. It feels good in its neoliberal skin. The question is how long it can continue since fewer and fewer can participate in its increased production. If we simply expect what comes to us, nothing positive will emerge.

We must search for answers. We should lose no time because we have no time to lose. Local resistance is necessary and interweaving or organization beyond the nations and the economic blocks.

Whoever only sees the poverty in Europe is in danger of only concentrating on distributing the wealth within its borders. A glance beyond the borders alone is not enough; more than an alms policy is necessary. Resistance must be local and global at the same time. This could be termed the glocalization of resistance. The globalization of the economy needs the glocalization of resistance. This doesn’t mean building a worldwide organization. However an interweaving is vital. The growing resistance must be territorially inclusive and radically democratic.

“We cannot describe the utopia; we must embody it”, I heard a Latin American say recently at a discussion. What eloquent words! If this demand doesn’t depress us because we know that it cannot be fulfilled but is an encouragement or incentive to us, then it seems good. We will not build any social community if we do not work on our egoisms. We cannot expect a feminist and non-racist society if we do not face our sexisms and racisms with mutual help – even if it hoping for the hereafter of revolution and setting ourselves as revolutionary subjects on the bench of the innocent little angels is more appealing.

The Zapatistas stand for this policy and have become the core of a worldwide resistance movement that inscribes this understanding of politics on its banners. This makes the Zapatista movement so fascinating for me.

“There is the problem. You began to seek a way that doesn’t exist. We must first create it.” The aged Antonio smiled contented. “But why do you say that we have to create the way? You created it. I only follow behind you”, I said somewhat uncomfortably. “No”, the elderly Antonio smiled again. “I did not create it alone. You were also there, a step ahead of me.” “Oh! This way is useless or good for nothing”, I interrupted him. I looked at him a while and finally dared the question “Didn’t you know whether the way that you create would lead us here?” “No. One only arrives by going forward; work and struggle are the same.”

The Zapatistas had no chances and used them. History is made.

[All the quotations are from Subcommandante Marcos (July 6 and 30, 1996). This text is in the book “Chiapas and the International of Hope”, 1997, by ISP publisher.]