Labor without value - Robert Kurz

Labor without value - Robert Kurz

In this short 2011 article Robert Kurz discusses the limits and deceptive appearances of Germany’s export-driven growth model with reference to the ongoing “devalorization of labor” and the resulting "labor bubble" in the context of capitalist crisis.

Labor without Value – Robert Kurz

Germany is admired everywhere as the world champion of economic recovery. The economy is prosperous and the labor market is expanding. But this pretty picture is deceptive.

The current high rates of economic expansion in Germany, compared to other western countries, only constitute a recovery from the especially deep slowdown of 2009. In that year, Germany experienced the largest contraction of production of any highly developed industrialized country, almost 5%. Such extreme oscillations, first towards the top and then towards the bottom, only show that the German economy is more dependent on exports than any other economy in the world.

The new upsurge is more concentrated than ever before in the automotive and machine tool industries. Auto manufacturers are focusing on supplying luxury cars to China and the US, while sales in Europe remain stagnant. Machine construction is playing a greater role in the wave of investments that China has made in its attempt to confront the crisis. But these two external motors of growth are maintained in operation principally by means of enormous public programs and artificially cheap money. If inflation, which is now on the rise, forces the central banks of China and the US to raise interest rates, the boom could quickly dissolve into thin air. When that happens, the much-ballyhooed new jobs in key export sectors will be revealed to be a “labor bubble”, which will have to burst, because the foreign buying power necessary for the export trade was not based on the creation of real value. The state money-making machine is no more viable than the finance capital money-making machine was before.

Despite the current hectic boom, in Germany the labor market in the export industries has a very narrow base. Export-oriented ideological chauvinism corresponds to a tiny “labor aristocracy”, while precarious employment is rapidly spreading throughout the domestic market because the winds of the profits and the income from the “dumping” economy do not blow inside Germany. The reduction of unemployment so proudly announced, is only in small part accounted for by new full time jobs, as guaranteed employment, in a few export industries. Most of the new jobs are temporary and pay less than the average secured by collective bargaining. Above all, however, there has been an explosive rate of growth in the number of jobs paying 400 Euros or less, which in 2010 reached 7.3 million. More and more regular full time jobs are being transformed into these kinds of jobs, and their wage rates are normally reduced to less than half the rates that were stipulated in the labor contracts that formerly applied to them. And women hold almost two-thirds of these mini-jobs. According to the laws of economics, a self-sustaining economic process has to cause the general price of labor power to rise. The fact that, to the contrary, the devalorization of labor continues in dramatic fashion is an indicator of the lack of substance of this recovery.

A large proportion of these precarious and temporary jobs are situated in sectors that are unproductive from the capitalist point of view. These jobs have to be supported by the production of real surplus value, which, in turn, is only simulated instead; it is only made possible by the creation of money by the state. The global export boom thus made possible only affects a minority of the population in the developed countries, and this is especially true of Germany. Cheap money leads to new investments only in these export sectors, and investments are lacking in industry, commerce and services. Instead of investing in the latter sectors, the flood of money coming from the central banks flows, as usual, towards the financial superstructure. The other side of “labor without value” is a new bubble in the global stock markets, which, under these conditions, certainly no longer constitute true indices of real economic development, and are instead self-referential mirages. The next devalorization crash of the financial markets, together with more inflation and a crisis of the public debt, is already in the offing.

Robert Kurz
Originally published in Neues Deutschland, May 2, 2011.

Translated from the Spanish version.