Workout. The Crisis of Labor and the Limits of Capitalist Society - Norbert Trenkle

Keynote lecture given by Norbert Trenkle of Krisis Group on the topic of "the future of work".

Submitted by adri on September 18, 2020


When Siemens’ CEO Josef Kaeser announced in November 2017 that his company was going to cut some 7,000 jobs worldwide and close several production sites in Germany, it triggered predictably fierce protest and criticism. People asked: why are they making cuts while the company makes high profits. The well-known grievance came from all sides that once again here was a company submitting to the dictates of the financial markets and the shareholders and that the “honest work” that made the company successful in the first place does not count anymore. Some liberal-minded journalists were even worried that the actions of the head of Siemens would damage the legitimacy of the capitalist system. In the Süddeutsche Zeitung, writer Detlef Esslinger wrote in November, 2017, that, “If you want, is for people to ultimately grow desperate with the market economy, capitalism, and globalization, then you have to act like Kaeser & Company. They are fostering the worst clichés about gluttons who are never satisfied that the stock market rates are high enough.”

In fact, the Siemens case highlights the status of labor as well as the power relations between labor and capital in the current era of the global capitalist system. Obviously, the dynamics of capital accumulation have shifted toward the financial markets over the last three decades and this has had drastic consequences for living and working conditions in society. But that is not due to the greed of any globally acting managers, bankers and investors. There are structural reasons that can be explained by the objectified historical dynamics of capitalist society. In order to understand how labor has been increasingly degraded over the last three decades, we must therefore look more closely at these historical dynamics first.

It should be stated in advance that the historical dynamics underlying capitalist society have a historically specific character. Here I am not referring to a trans-historical logic of social development as traditional Marxism would have it (placing it well within the Enlightenment tradition). Instead, I am referring to a dynamic that is the product of an internal contradiction in capitalist society and therefore applicable to that society only. The first moment of this contradiction is the compulsion to relentless accumulation of capital. Capital is nothing more than value that must be valorized, which is to say augmented. Value empirically takes the form of money and in that sense its valorization can be illustrated in Marx’s famous formula M–C–M’ [M prime], that is money–commodity–more money. We can call this an end-in-itself motion because the same thing is at the beginning and the end of this endless augmentation loop: money is turned into more money. Value (in the form of money) therefore again and again refers to itself alone and the sole objective of this movement is the constant accumulation of surplus value. By its own internal logic, this end-in-itself motion does not recognize any limits. Because of its purely abstract-quantitative nature, it must, in principle, continue endlessly. That is the basis for the incessant drive for growth in capitalist society—which, as we all know, is destroying the basis of human existence on earth.

This drive toward incessant accumulation of capital now confronts a second moment, namely the compulsion to constantly develop productive power or, as we say these days, perpetually increasing productivity. This compulsion, which is produced by competition between the individual capitals, exists in an internal contradiction with the endless self-refering motion of the valorization of value. Because increasing productivity always leads to a reduction in the expenditure of labor per commodity and, consequently, to a reduction in the share of value represented by each individual commodity. This is because value is not valorized in a vacuum but rather is based on the fact that labor power is expended in the production of commodities. Capital acquires labor power in order to apply it to the production of commodities and skim the added value, which is possible, because the reproduction of labor power costs less than the surplus value it produces during working hours. If the expenditure of labor per commodity is therefore reduced, due to increased productivity, then the share of value represented by each commodity also decreases. And that represents a tendency that opposes the end-in-itself motion of capital valorization, which only can go on, if more value is constantly produced.


But from a historical perspective, this inherent contradiction in the logic of capitalist dynamics has been no obstacle to the valorization of capital. The effects of productivity have been compensated and overcompensated by accelerated expansion into new markets and development of new manufacturing sectors for mass production. The reduction in the value of individual commodities has thus been offset by accelerated overall growth such that more and more value has been skimmed off the bottom line. This dynamic took on particular force during the relatively short era of Fordism, particularly during the roughly thirty years after World War II. In the capitalist centers, that period is regarded as a kind of golden age because it was the first time the wage-dependent majority of the population was able to participate in capitalist wealth in a significant way. But that era (which has been romanticized in retrospect) came to an end in the mid-1970s when the Fordist boom reached its limit and a new productivity boost began, this time based on new information and communication technologies: the Third Industrial Revolution.

The Third Industrial Revolution represents a qualitative break in the history of productivity growth. This is because microelectronics facilitated a radical reorganization in production overall such that labor lost the central importance that it previously had and knowledge—or, more precisely, the application of knowledge to production—became the main productive force. But this upheaval had devastating consequences for capital valorization. With the massive displacement of labor from production, the source of surplus value, which had previously fueled the end-in-itself motion of valorization of value, dried up. This is empirically demonstrable in the fact that global material production output (which is to say the mass of produced commodities) has increased many times over since the 1980s while the number of workers in the core sectors of global market production has declined considerably during the same time period. The development of new manufacturing sectors for mass consumption has done nothing to change that because they have been organized on the terms of process automation. As a result, the world has been drowning in a rapidly growing flood of commodities (leading to the accelerated destruction of natural resources), but they represent an increasingly declining amount of value because they can be produced with less and less labor power.

That is why the crisis of Fordism grew into a fundamental crisis of capital valorization that could no longer be resolved in the same way that previous major crises had been in the history of capitalism. The development of new growth areas for the application of labor power to commodity production was and is no longer possible at the existing level of production. Even the Keynesian methods of business revival as they were applied everywhere in the 1970s came to nothing and only led to a bubble in national debt because they were not able to fix the structural causes of the crisis. As a result, classical capitalism reached a historical limit that it could no longer overcome in the 1980s.

Although, after several attempts, another way out of the crisis of capital valorization emerged: the capital that could no longer be sufficiently invested in the so-called real economy evaded to the financial markets on a grand scale. Thus capital resumed its end-in-itself motion of augmenting money, however this was no longer based on the application of labor to production of commodities but rather on the accumulation of fictitious capital. Since then, this form of capital accumulation has determined the trajectory of capitalist society. And that implies, that labor has lost its previous status in the dynamics of capitalism. To understand, what this means for labor in society, we must first ask, what constitutes the specific character of the accumulation of fictitious capital and how does it differ from capital valorization through the application of labor to the production of commodities.


The concept of fictitious capital comes from Marx’s critique of political economy, but it was only developed in fragments there in volume three of Capital. In our book Die große Entwertung (The Great Devalorization), Ernst Lohoff and I refer to these fragments and attempt to develop them and make them useful for an analysis of the contemporary crisis of capitalism. The essential points can be summarized as follows:

Fictitious capital arises whenever someone gives money to someone else in exchange for a title of ownership (a bond, share in a company, etc.) that represents a claim to that money and its augmentation (in the form of interest or dividends, for example). This process doubles the original sum: Now it exists twice over and can be used by both parties. The recipient can use the money to buy things, make investments, or acquire financial assets yet at the same time it has become monetary capital that yields a profit for the one who gave the money in the first place. Capital is thus augmented by the simple act of issuing a financial security. To put it another way: capital has been accumulated even though nothing has been produced. But this monetary capital consists of nothing more than a documented claim representing the anticipation of future value. Whether or not that anticipation is covered by value production only becomes clear in retrospect.

Anticipation of future value in the form of fictitious capital is a standard feature of capitalism. But it took on a completely different meaning over the course of the crisis in the wake of the Third Industrial Revolution. If the creation of fictitious capital once served to flank and support the process of capital valorisation (for instance through pre-financing large investments), now those roles have reversed because the basis for that process has fallen away. Capital accumulation is no longer significantly based on the exploitation of labour in the production of commodities like cars, hamburgers, and smartphones but on the massive issue of property titles like shares, bonds, and financial derivatives that represent claims to future value. As a result, fictitious capital itself has become the engine of capital accumulation while the production of commodities has been reduced to a dependent variable.

Of course, there is a critical distinction between this form of capital accumulation and the prior form of capitalist motion. Because it is based on the anticipation of value to be created in the future, it is a process of capital accumulation without capital valorisation. It is not based on the present exploitation of labour power in the process of producing value but on the expectation of future profits, which must ultimately be derived from additional exploitation of labour. But because this anticipation cannot be redeemed in light of the development of productive power, these claims must be renewed again and again and the anticipation of future value must be postponed further and further into the future. As a result, the financial property titles are subject to an exponential growth imperative. That is why the value of capital consisting of financial assets surpassed that of manufactured and traded commodities many times over long ago. These “runaway financial markets” are often criticised in public opinion as allegedly causing the crisis, but in fact, once the basis for valorisation was lost, this was the only way for capital accumulation to continue at all. That is why we refer in our book to the era of inverse capitalism, in order to delineate the current period from classical capitalism, which was based on the application of labor to commodity production.

The dominance of finance-industry accumulation does not mean that capital accumulation has been completely delinked from the real economy. In its way, capital accumulation in the finance industry always refers to certain reference points in the real economy. It does not assume that any valorization has happened in advance, but it does anticipate profit in the future. It is therefore dependent of hopes and expectations of future profit increases on the commodities markets, or at least certain commodities markets. For example: Every real estate boom is based on the prospect of increasing real estate prices and every rise in market prices is set in motion by the hope of future corporate profits.

The specific crisis vulnerability of the era of fictitious capital can be explained by the fictitious capitals dependence on profit expectations in the real economy hope. Whenever those forecasts turn out to be illusions and speculative bubbles burst, the accumulated fictitious capital loses its validity and the dynamics of accumulation stops. As most recently occurred during the global crisis of 2008, in such a situation, the economy is threatened with a downward spiral of devalorization in which the suppressed fundamental crisis process becomes manifest. There is only one way to prevent this: by creating new, even larger amounts of fictitious capital whose accumulation is fed by profit expectations in other areas of the real economy. But the longer the era of fictitious capital lasts, the more difficult it is to exploit new areas that provide hope for the real economy. The finance industry therefore cannot continue its accumulation endlessly. It has its own intrinsic limits, which are constantly getting closer. I will not go into further detail about these intrinsic limits but instead want to look at the consequences of fictitious capital accumulation for labor—and for the mass of people who rely on the sale of their own labor power.


In the first place, we can say that, from an economic perspective, labor experiences a fundamental loss of significance for capital, when capital is no longer significantly augmented through the exploitation of labor power in the production of commodities and by appropriating the corresponding surplus value but rather refers directly to itself. When capital (in the form of titles of ownership) is sold as a commodity and the original capital is doubled in the course of that sale (if only for a limited time), then the capital fetish has reached its ideal form. The M–C–M’ [M prime] movement becomes the abridged M–M’ [M prime] movement, in which capital augments itself without its inconvenient detour through commodity production. But this clips the capital accumulation’s direct connection with the world of material goods and services. That production was only ever a means for the reproduction of money for its own sake, but it had to happen in order to keep the valorization cycle going. Now it does not even have this instrumental function anymore. And this implies, that the labor-power commodity is losing its central significance for the accumulation of capital.

During the era of classical capitalism, which was based on the valorization of value and came to an end with the crisis of Fordism, labor power was the basic commodity of capital accumulation because it was the only commodity whose use value consisted in producing more value than the cost of its own regeneration. For the sellers of the labor-power commodity, this special position meant, on one hand, having to serve capital every day and submitting to the compulsions of commodity production. On the other hand, it gave them a relatively strong negotiating position with respect to capital, allowing them to establish significant improvements in pay, working conditions, and social protections—at least in the capitalist centers. Moreover, the specific conditions of production of standardized mass labor, particularly in the Fordist era, facilitated broad union organizing.

But with the end of classical capitalism, this constellation of a relative balance of power between capital and labor has fallen apart completely. Automation of production and the establishment of a new transnational division of labor known as globalization were not the only things that have significantly weakened labor sellers’ negotiating position since the 1970s and ‘80s. Deregulation and flexibilization of working conditions and the targeted weakening of unions through neoliberal policies also contributed. But what was decisive for the long-term and sustained change in the power relations between capital and labor was the fact that the focal point of capital accumulation shifted from the exploitation of labor power in commodity production to the financial markets. As a result, the labor-power commodity lost its status as the basic commodity of capital accumulation and became the dependent variable of the dynamics of fictitious capital.

This is because, even if the accumulation of fictitious capital can never completely decouple itself from production for the goods economy, its relationship to this sector is nonetheless different from what it was under classical valorization of capital. In the era of inverse capitalism, as I said previously, activity in the real economy only fulfills one function for capital accumulation: it can provide hope for future expectations. Growth, or hope for growth, in particular regions or sectors is a starting point for the creation of new financial titles and as such give impulses for the accumulation of capital at the financial markets. But at the same time, the activity in the real economy fundamentally and structurally depends on a constant influx of fictitious capital. This applies to the consumption of goods and services that are paid for with revenues and credits from the financial sector, but also to investments in industry, raw materials, and above all the construction industry. Those investments can only happen while financial market dynamics remain in motion. In all these cases, labor power is set in motion, but it is completely dependent upon the economic conditions of fictitious capital.

Thus, fundamentally, in the era of inverse capitalism, material production (and, consequently, the expenditure of labor power) only happens to the extent that it is directly or indirectly induced through the accumulation of fictitious capital. The real economic sectors will boom only as long as they are fed by money produced in the financial sector, money which by this way simultaneously creates new reference-points for the continuation of its own self-referential dynamics. If this circle is broken for one reason or another, it immediately leads to a strong reversal in the spiral motion of accumulation, causing a massive devaluation of financial titles with immediate repercussions on activity in the real economy. This relationship is particularly direct in the construction industry because speculation on rising real estate prices is directly connected to the construction of buildings and the expansion of infrastructure. Moreover, the construction sector is always relatively labor-intensive because it cannot be automated to the same extent as industrial production. In every boom region it is therefore the biggest purchaser of labor power and has turned to be the greatest single position in GDP statistics. But for the same reason, the construction sector is also particularly susceptible to crises of fictitious capital, as the crisis of 2008 has most recently shown.

But also the industrial and raw materials sectors, particularly in export-oriented countries, are fundamentally and structurally dependent on the dynamics of fictitious capital. This is particularly apparent in the case of China, which buys up massive amounts of financial title, primarily from the United States, as a counter-value for the export of its commodities around the world. Without that mechanism, it could never have industrialized so rapidly, because this implied necessarily piling up an enormous and continuous export surplus that had to be compensated in some way by the importing countries. That is why, after the crash of 2008, the Chinese leadership bypassed the missing fictitious capital from abroad by creating fictitious capital domestically —primarily by creating tremendous amounts of credit through the state-controlled banks. As a consequence, China’s internal debt has swollen and represents an enormous global crisis risk today.


Sellers of the labor-power commodity do not only notice labor’s extreme dependence on fictitious capital during the periods of acute financial crisis, but rather also during the normal course of the accumulation. In particular, immense pressure is produced by high yield expectations, which are measured by profits in the financial sector and are far above the norm under classical capitalism. In order to meet them, wage and labor conditions must be continuously pushed downward and working hours must be ruthlessly expanded. There is no site and no company that has been spread from this worldwide dumping contest. Pulling out of it is punished by withdrawal of capital, which, because its focal point is in the financial sector, has become almost infinitely flexible. Even the largest transnational companies and global market players are subject to this pressure. The previous example of Siemens is typical: it shows how the relationahips between labor and capital has been turned on its head in the era of inverse capitalism. If a global company had announced forty years ago that it would close a perfectly viable location and fire several thousand employees, the shareholders would have kicked out the managers for sabotaging the valorization of the company’s capital. Obviously locations were closed and mass layoffs occurred then as well, but that only happened when a factory lost money over the long term and could no longer be made competitive through rationalization. Ultimately, it was a matter of expanding investment opportunities for capital in the production of commodities for goods markets.

This logic no longer applies in the era of fictitious capital because creating new accumulation opportunities for capital no longer requires the expansion of production. Instead, the important thing is the continued reproduction of financial titles, which represent claims to future value. The current profitability of a particular production location is only a superficial reference point for that process. From that perspective, average profitability no longer appears to be sufficient, as the threatened Siemens location shows, because it cannot keep up with the financial markets’ profit targets and because it does not generate fantasies of future profit increases. That is why their closure pushes the shares of the affected company up, even though it amounts to the destruction of functioning capital. The fact that the company’s productive base has been reduced is irrelevant because the actual consequences in the real economy are secondary for the accumulation of fictitious capital. The crucial point is the creation of expectations of possibly high future profits that can be realized today.

Although if these expectations are not met, the shares or stocks can be divested in seconds and replaced with other financial titles. That is why fragmenting companies into various components that are then placed separately on stock exchanges is so popular in the world of management —a discipline that, incidentally, Siemens CEO Josef Kaeser commands quite well. The criterion for that kind of fragmentation is therefore not whether or not it makes sense for the company’s production technology or organization. What matters is, again, that new reference points for the accumulation of fictitious capital are created with each business unit that is sent onto the stock exchange (ideally with an imaginative name). The same logic has been and continues to be followed by the broad sale of public infrastructure and utilities. It is well known that privatization makes in no way services “more efficient,” despite what the neoliberal ideologues claim. In fact, they usually turn worse and more expensive. But here as well, new imaginary points for the accumulation of fictitious capital are created.


The fact that labor has become a mere appendate of fictitious capital in the era of inverse capitalism has not harmed its moral status in society in the least. On the contrary: labor is under increasing pressure and has lost economic significance as well as social and political negotiating power. That’s why it has massively regained relevance in the last thirty years for the construction of individual as well as collective identities. In the 1970s and ‘80s, the capitalist work ethic and identification with work as one’s purpose in life came under criticism through the impact of the “crisis of labor,” as was widely discussed at the time, and in the wake of the cultural revolution of 1968. But with the political turn toward neoliberalism, which initiated the era of inverse capitalism, an ideological change took place. Initially, it were the neoliberal elites and the neoliberal-oriented social democrats who preached a return to the work ethic and, consequently, legitimized flexibilization and deregulation of labor relations above all as well as clear-cutting the welfare state. But after the devastating social effects of these policies became unmistakable, there was a new ideological turn. Idenfitication with work or labor broadly became the reference point for a regressive, nationalistic critique of neoliberalism and the financialization of capitalism. Populists on the right and the left now evoke the construct of “good, working people” and promise to put them back at the center of society. That is apparently supposed to happen by means of a return to the “market economy” based on mass labor, which will be regulated by a reinforced national state for the common good.

But what appears to be a radical criticism is in fact no less than a dangerous political regression. Basically the appeal to labor is identical to an affirmation of the core of capitalist society. The historical specificity of capitalist society is constituted precisely by the fact that it places labor at the center, unlike all other previously existing societies. Because commodity production always means that social relations are mediated through labor. But this form of mediation is necessarily reified and constitutes a certain form of abstract domination which is historically specific for capitalism. People do not interact with one another directly but rather via the products of their labor (that is, commodities) and the sale of their labor power. Thus the social relations are transformed in relations between things. The products of labor thereby gain power over their producers and exercise their reified compulsions on them. Marx called that the fetishism of commodity-producing society. These fetishistic compulsions not only have an outward impact on the individuals, they also form and shape them in a fundamental way. To put it bluntly, we can say that individuals under capitalism become subjects through labor, by treating all other members of society and the society as a whole, as objects. Labor is therefore intimately associated with the constitution of the modern subject. That is also why identification with one’s work seems so natural and indisputable.

The modern individuals are obviously not conscious about this fetishistic constitution. For them, labor appears to be a trans-historical constant that constitutes the essence of “humanity.” From that perspective, it is no surprise that criticism of capitalism is almost always accompanied by positive references to labor. That labor is at the core of human beeing, is the creed not only of liberalism but also of traditional Marxism, whose relation to labor took on a virtually religious overtone. It considered the working class to be the true subject of history and therefore the predestined bearer of social emancipation. According to this traditional Marxist vision, emancipation essentially meant establishing a society based on universal labor, but in which there was no such thing as capital anymore. In other words, it was a matter of liberating labor from capital and not of liberation humanity from labor.

But this conception is a contradiction in terms. A society in which social relations are focused on labor, conceptually is a society of commodity producers. And universal commodity production structurally implies abstract domination and also the existence of capital and the state. So-called “real existing socialism” was therefore nothing more than a variant of capitalism in which the state, in its way, adopted the function of a general capitalist. Capital is not an external force that submits labor, but rather capital and labor are both at the core of a society based on commodity production.

From that perspective, the great majority of the good old labor movement was not a movement against capitalism either but rather a movement for labor within capitalism. As such, in its time, it essentially helped to make life within the existing order a great deal more bearable and to gain liberties within the existing order. Likewise, its struggles helped to keep alive the idea of social emancipation in a certain way. On the contrary, the glorification of labor in the new populism had a completely different character. In the old labor movement, identification with work was a reference point for practical struggles for social recognition, improvement of working and living conditions, and political participation during the era of capital valorization based on mass labor. The new populism, by contrast, represents a reaction to the fundamental degradation of labor by the dynamics of capitalist crisis and is driven by the nostalgic desire to return to a long-gone era of capitalism.

In that sense, labor populism today—both its right- and left-wing variants—is, in the strict sense of the word, regressive. The fact that a return to an earlier stage of capitalism is impossible does not make it any less dangerous; that there is no way back, is precisely what makes populist politics to become increasingly aggressive in an unpredictable way (just think of Trump). The tendency toward nationalist partitioning is intensifying worldwide at the same time that authoritarism is advancing. Wherever the new populists come to power, they systematically dismantle the liberal democratic constitutional state by abolishing the classical division of powers and traditional checks and balances. They do it all, of course, “in the name of the people” and to allegedly “restore democracy.”

Today, the fight against this political regression is the paramount task of anyone who still holds onto the possibility of an emancipated society. But that struggle can only be won with an intensified critique of capitalism. The fact that it draws on widespread unease with capitalism is not the least of the reasons why authoritarian populism from the right or the left is so successful. But even if this unease points toward a vague awareness that capitalist society has reached its limit, it is being channeled primarily into the desperate desire to preserve the existing social order against the dynamics of its own crisis. The appeal to labor as a pillar of identity is a central motif in this. But since the “honor of work” in the traditional sense can no longer be kept up, what remains of that identity is only its contribution to social and racist exclusion and nationalist delineation.

A well-grounded critique of labor as the central principle of capitalist society is therefore not an intellectual make-work project but rather a crucial project for opening up a new perspective for social emancipation. The abolition of labor is in no way a utopian idea in that. Capitalism has been abolishing labor in a negative sense for a long time anyway. On one hand, it has largely made it superfluous through the productive power of knowledge and, on the other, it has degraded it to a mere appendage of the accumulation of fictitious capital. It would only be possible to regress to a point behind this stage through a social disaster. In contrast, it is necessary to use the enormous productive potential that capitalism has created to finally make a good life possible for the entire world. But that cannot happen without a fundamental social transformation.

The conditions for liberation from labor and for the creation of a society in which everyone acts according to his or her needs and abilities have existed for a long time. But that possibility has to be realized.

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