NAKED EXTORTION

Hartz IV and its Consequences: Employer Associations seek a Breakthrough on the Wage Front at any Cost

By Hans Thie

[This article originally published in: Freitag 36, August 27, 2004 is translated from the German on the World Wide Web,  http://www.freitag.de/2004/36/04360101.php.]

Perhaps it would be better for all of us if Wall Street took over the fate of Germany. Then the economics minister could be Jim O’Neill, the chief economist of the investment bank Goldman Sachs. He could counter the astonishing catastrophe songs of the German establishment that are feared abroad. “Germany’s businesses are extremely competitive.” Since this success can hardly increase further (“Where will you send all the goods, Antarctica?”), Germans must liberate themselves from their export dependency as quickly as possible and strengthen domestic demand.” This can only happen when the “dramatic weakness in income development” is overcome, especially “with lower income groups”. As an emergency program, O’Neill recommends in an interview in ZEIT: “The German government should send checks to all households that will immediately spend them.”

What an inverted world! What unions, Attac, the PDS (party of democratic socialists) and the “Labor and Social Justice” group urge is an obvious economic theme for representatives of international financial capital. O’Neill even goes a step further than the German left that – intimidated by years of positional debates – hardly dares the consequences of its own analysis. When nothing clicks any more, throw money directly among the people without any counter-financing. The maneuver will have an effect. Forget the Maastricht criteria when your future is at stake.

These insights still lack a majority. However luminaries of the German economy proclaim that the wage costs of the location must be forced down, that growth is only possible with falling incomes, that the bath tub can only be full when the water is turned on. These luminaries have long followed this course and sometimes lose all standards or sense of proportion. Forced labor with pocket money is the real winner but is not the last word. The caravan can even go further if one-Euro jobs can be discussed without any shame. The party whips are already there. The Institute of the German Economy wants the wage compensation law preserved for the lowest paid normal jobs. “An expense allowance of 50 cents per hour should be paid.” Then one hears that five Euro per hour is a generous offer for a skilled worker in industry.

While interest circles smell a rat, Hartz IV is an all-out attack on the unemployed and a tried and tested door opener to assault the wage front after taxes are lowered and social systems put on a diet. Drastically limiting or abolishing the right of association of dependent employees – that is, unions and collective bargaining – is impossible. Lowering student wages by lengthening working hours is a difficult affair. However naked fear, the prospect of falling incredibly, could make people toe the line. Therefore the appeals to the German chancellor free our way to another republic.

Can this united front of the extortionists and their willing accomplices be stopped? That people take to the streets again for the first time in a long while is a sign of hope. These people had long passively accepted every social cut. The Monday demonstrators have already changed the mood a little. What is the purpose of life? The rage will not be hidden any more in the end time. Commentators express sympathy and understanding.

Still the indignation will only be effective if it penetrates the realm of political logic. The protest will have a sounding board if there are independent thinkers like O’Neill in the German middle class who question the economic sense of permanent cuts. Where are the renegades who refuse to sacrifice the development of the country on the altar of the German export business? Why do unionists only speak about the injustice of this or that measure but not about the adventurous course of the public corporation of Germany?

Nothing that we presently experience is future-friendly in the long run. This is not indifferent to business associations. They want to breakthrough on the wage front at any cost. The task of political parties could be defending the interests of public welfare against this radicalism. However no one observes this responsibility. The government and the opposition are parts of that faith community that only knows the mantra of the endangered location.

If the whole establishment runs into a cul-de-sac, fundamental alternatives to present capitalism could be discussed at last. While this conclusion is obvious, satisfaction should be kept within reasonable limits. The new designs will come but the time is not yet ripe. For the moment the embarrassment and justification distress of the political class could be used to demand what is overdue: labor paid and socially secured through collective wage agreements where the need is immense, public investments in all the fields that were not tilled in the slashing mania of the last years, above all a basic security deserving its name. Such ways out of the shriveling spiral are impossible without state indebtedness from which no one may be exempt. At some time or other, a powerful state impulse will be necessary. When this door opens, whether we have the intellectual and organizational strength to provide for another world will be clear.