On the Current Global Economic Crisis: Questions and Answers (2010)

Robert Kurz

Over the course of the last three years, the economic crisis has generated three distinct phases of transformation: from the crisis of the real estate market to the crisis of the financial markets, from the crisis of the financial markets to the economic crisis, and from the economic crisis to the currency crisis. To what extent can these three phases of crisis be explained by means of your concept of a general economic crisis of capitalism?

These three phases of transformation merely constitute the surface of events. The crisis of the real estate market was the trigger for a crisis of the finance and debt systems, which had been smoldering for a long time. The latter crisis did not result from the so-called excesses of speculation that stood opposed to a presumably healthy “normal economy.” Rather, the opposite was the case: the finance and debt bubbles were a consequence of a lack of actual valorization of capital. The credit superstructure has never been an external factor, but it has always been an integral component of capitalist commodity production. Over the course of the past two decades, this internal relation has been amplified into a structural dependence of the so-called real economy on the finance markets. Consequently, the financial crisis could only result in a historical collapse of short-term economic prospects.

All three phases were already contained in the close succession of crises following the first case of insolvency in Mexico in 1982. What initially only seemed to be a debt crisis on the periphery quickly reached the global capitalist centers. In the early 1990s, the Japanese real estate bubble burst and the Nikkei shrank down to a quarter of its peak level, and to this day Japan has not recovered from the resulting banking crisis and the stagnation of its national economy. In the mid-1990s the accumulated foreign currency (largely U.S.) debt of the tiger economies led to a financial collapse and resulted in currency crisis and sharp recession. Similar events occurred in the context of the Russian financial crisis at the end of the Yeltsin era and in Argentina toward the end of the twentieth century. The bursting of the dot-com bubble in 2001 resulted in the disappearance of the new markets, along with their astronomical market capitalization of small Internet and software enterprises, which led to a brief global economic recession. All of these crises had one thing in common: they were limited both to particular regions and to specific sectors and consequently seemed manageable, in particular by means of the stagnation or lowering of federal interest rates for which Japan had provided an example. This financial strategy on the part of the central banks (in particular the U.S. Federal Reserve), however, not only brought about the largest real estate bubble of all time but also further sustained a deficit economy of unexpected proportions that manifested itself primarily in the circulation of deficits between the United States and China, which was able to help support the global economy for a few years. Up until the early summer of 2008, economic institutes calculated that the boom would last for decades, despite the fact that they were well aware of the “imbalances” underlying the one-way street of Pacific exports. But the problem was strategically understated in the face of the apparent success of “finance-driven economic growth.”

The bankruptcy of Lehman Brothers in the fall of 2008 revealed that the global finance bubble economy had in reality exhausted itself. The resultant global chain reaction simultaneously affected not only the large finance centers but also virtually every corner of the globe, from Iceland to Kazakhstan. The global deficit economy had run out of steam, and the collapse could no longer be prevented by additional monetary contributions from the central banks. Everywhere, the responsibility fell on state credit systems to a degree that surpassed even the war economies of the past. The bailout packages for the banking system did not fix the system but only temporarily kept it alive. Additional national economic stimulus programs were able to avert complete collapse, but ultimately the problem was merely displaced from finance bubbles onto state finances.

These consequences initially manifested themselves in the threat of Greek bankruptcy and the associated crisis of the European monetary union. Greece constitutes the weakest link in the eurozone, which in turn constituted the weakest link in the global economy, since the euro had (as an artificial currency) been based on wholly disparate national production levels and differing strengths of capital and as a result was only useful for the one-way flow of exports of a deficit economy. This currency crisis, however, is qualitatively different from those that preceded it: it is the avatar of a general crisis of state finance, which will not only affect the central E.U. states such as Germany, France, and Great Britain but also the United States and China.

Currently, we come across consolatory narratives everywhere, arguing that the bailout packages are restoring trust in a finance system in crisis and transforming the mountains of bad credit back into tradable credit, while the immense stimulus packages are providing the thrust for the development toward a new, self-sustaining global economy. This “all clear” discourse that is merely attached to the surface of things and whose life span is largely limited to the beginning of the next quarter does not, however, take into account the fundamental laws of a capitalist system. The crisis process that has been underway since 2008 not only constitutes the culmination of previous, partial signs of crisis — it is also distinct from previous economic and structural crises.

What has come to fruition here is a secular, immanent contradiction of the valorization of capital, which can be represented in two distinct stages. Initially, the development of productive forces that was a result of the necessity of competition led to a disproportionally rapid growth of fixed capital relative to labor force as a result of the increasingly scientific character of production. In order to employ even one single worker for the production of capital, it is necessary to mobilize a constantly increasing aggregate of real capital (increasing capital intensity). As a result, the “dead” advance costs of the valorization of capital increased to a degree that increasingly made it impossible to finance these costs out of the generated profit itself (machines only transfer previously generated value; they do not generate new value). The result of this was a historical expansion of the credit system that quickly encompassed all areas (corporations, the state, and private households). More and more frequently, it became necessary to draw on future surplus value (in the form of credit) in order to be able to generate actual surplus value. This contradiction was tenable as long as those credits could be paid back by means of ongoing surplus production. This compensatory mechanism, however, effectively disappeared with the onset of the third industrial revolution (microelectronics) at the end of the 1970s — labor power that generated actual surplus value was in this new historical dimension gradually rationalized out of existence. As a result, the chains of credits, which had to reach further and further into the future, threatened to break, and in fact did so in a number of areas. It is no accident, therefore, that the onset of the third industrial revolution coincides with the beginning of a series of financial, economic, and currency crises, the culmination of which we are experiencing today.

The so-called neoliberal revolution was not a subjective, political project. It was rather an escape strategy from the objective problems of a shortage of actual surplus production, based on the rapid acceleration of current processes without any change in direction. What is now frequently naively presented as a historical error — that is, the large-scale deregulation of finance markets — was in reality the only strategy that allowed for a further deferral of the collapse of the global system. The valorization of capital was virtualized in the form of fictional capital that could no longer be matched by the actual substance of value. The debt economy mutated into a finance bubble economy (stocks and real estate) with increasingly adventurous derivatives. Over the course of two decades this relation developed into an unprecedented actual economy determined wholly by deficits. Indeed, it is necessary to refer to this kind of economic system as a deficit economy, since fictional valorization did not remain confined to the discrete sphere of finance as in previous moments in history but, in the form of the insubstantial consumer purchasing power of the middle class (alongside real-terms declines in wages), entered the real economy and thus fuelled the global boom. The millions of apparently real jobs in the one-sidedly oriented export industries are an optical illusion, since the sale of their products is based not upon real profit and wages but instead on the injections of a rotten credit superstructure and finance bubbles.

The release of large sums of money by the central banks, which completed the break with the monetaristic doctrine of neoliberalism (a limitation of the total sum of money), was itself already a desperate measure. The recent displacement of the problem onto the sphere of state credit does not solve the problem but instead only further delays it until the next expected collapse. There is no real potential for valorization for which state-sponsored bailout and stimulus programs could provide the thrust. Hence, the internal relation between financial, economic, and currency crisis reveals itself as an internal historical limit of capital on the level of the development of productive forces and the increasingly scientific character of production that it generates. The degree of negative socialization (socialization based on value and competition) that has currently been reached can no longer be contained by capitalist categories.

According to your own estimates, how high is the risk of inflation or deflation?

Inflation and deflation are merely two different forms of devaluing the aggregate relations of capital. Structural mass unemployment, increasing precarity, and dumping wages — the new global standard resulting from the third industrial revolution — already brought about a deflationary devaluing of the commodity of labor, of what Marx would call the “variable” component of capital (the only component that generates new value). The underside of this was the finance bubble economy, the development of titles and properties without substance (thus entirely fictional) as asset inflation. Because the global connections of this asset inflation touched a number of currency areas, it was able to persist for quite a while without immediately triggering a large-scale devaluation of the monetary medium in general. Such a devaluation, however, was already to be expected in the final stages of the last deficit economy when the rates of inflation in many newly industrialized countries (including China) approached twenty percent, and the United States expected a rate of six to ten percent by the end of 2008. In principle, therefore, the inflationary endgame of such a creation of purchasing power without substance via finance bubbles, despite its complex global mediation, would have been no different from the classic idea of solving the problem by printing more and more money.

The path toward this scenario, however, was disrupted by the crash of the finance markets, which in an instant eliminated trillions of dollars of fictional assets, leaving behind mountains of basically worthless certificates in the vaults of banks. The asset inflation, therefore, did not turn into a monetary inflation but gave rise to an asset deflation. After the mechanism of the deficit economy had abruptly come to a standstill, a similarly rapid reduction of global excess capacities (especially in the auto industry) should have followed, since these capacities were based upon the influx of fictional purchasing power from the debt and finance bubbles. What should have followed is thus a large-scale devaluation of real capital (the means of production) and commodity capital on markets (commodities rendered unsellable), together with an increased push toward the devaluation of labor power (massive job losses). To this day, we are witnessing a global wave of bankruptcies, yet the deflation of real and commodity capital has for the time being been slowed by means of the gigantic state programs financed through credits. Both in the finance sector and in the production sector the beloved “market clearing” was prevented, contrary to the laws of the market, since, due to the lack of potential for new valorization, such a market clearing would have left behind nothing but an economic wasteland.

However, the dismantling of excess capacities has only been delayed, and in the not-too-distant future it will be executed via the crisis of state finance. All economic stimulus and bailout packages are ultimately nonproductive state consumption, even if their effect on the surface is artificially to keep alive a variety of businesses. States would have to finance the credits for such consumption by taxing the profits and salaries resulting from the real production of surplus value. But this, of course, is circular logic, since the former effort has only become necessary in the first place because the latter process no longer occurs to a sufficient extent. The ultima ratio in such an inescapable situation is, therefore, the increased printing of money as we have come to know from war economies — now, however, this is done in order to prolong the life of capitalism and its mode of production itself.

The central banks themselves have dismantled a variety of security structures by accepting, against their own rules, toxic certificates from banks as “securities” or by acquiring potentially worthless state loans from candidates for state bankruptcy (see the practices of the European Central Bank). On one hand, the mechanisms are put in place for the development of an enormous inflation potential (meaning the devaluation of money, of the capitalist end in itself) from which all aggregate relations of capital depart and into which they must be transformed back. Since the flood of money resulting from state-sponsored bailout and stimulus packages (as opposed to the flood of money generated by the central banks for the transnational finance markets) is directly injected into the respective currency areas, the incubation period for the realization of inflationary potential is much shorter than in the case of the transnational finance bubble economy. On the other hand, we do not see any form of apprehension with respect to further increasing the amount of new money being printed. The actual, relative stabilization on a lower level than in times of a booming deficit economy would have to be permanently subsidized by the state, and this, of course, is only possibly via the creation of new money. As a result, the saving programs in fact counteract the rescue, stimulus, and bailout measures.

This dilemma is bound to continue to run its course, in particular because the back-and-forth of mutually contradictory measures cannot lead to the vanishing of deflation and inflation into thin air. Since inflation (with regard to money proper) and deflation (with regard to labor power, monetary assets, real capital, and commodity capital) are merely different forms of devaluing elements of capitalist reproduction, they could in principle occur simultaneously. This will increasingly be the case since the emergency-driven monetary and economic policies continue to oscillate between fundamentally contradictory options. Already at the end of the 1970s and at the beginning of the 1980s, we witnessed the simultaneity of deflationary stagnation and increasing inflation (what came to be known as “stagflation”) resulting from a lack of real valorization. Indeed, it was precisely this stagflation that was the grounds for the neoliberal revolution, which, however, simply produced an historical deferral by means of the deregulation of the finance bubble economy. Now, the old problem returns on a much higher level of internal contradictions. As a consequence, what has become possible is a simultaneously inflationary and deflationary shock at the moment at which one of the contradictory measures is taken to its structural extreme and exhausts itself, as well as a period of stagflation with decidedly more dire consequences than thirty years ago, should both options exhaust themselves in quick succession.

With regard to the crisis of the Greek economy, critics of neoliberalism accuse German economists of misrepresenting relations and determinations, of strangling the welfare state with the IMF’s saving measures, and of generally pursuing contradictory solutions. Do you agree with these critics or does their evaluation of the matter miss the core of the problem at hand?

A pure critique of neoliberalism (as advanced by ATTAC and a large portion of the Left) is abbreviated, since it does not reach the internal relations of the crisis and instead simply addresses what are seen as erroneous economic policies. Often related to this is the hope for a return to Keynesianism and the resulting return to a “good” form of capitalism characterized by investments in certain labor sectors and the gratifications of a welfare state. Yet, this is illusory and misses the core of the problem, since both the neoliberal and the Keynesian doctrine presuppose, similarly blindly, the capitalist mode of production, its categories, and its criteria. In the context of the current crisis, however, the predominant mode of production itself is the problem. Keynesianism can only return in the form of crisis and emergency management — that is, as a continuation of neoliberalism with different means — and this can only lead to a further intensification of the contradictions.

It is, however, correct to assert that German politicians misrepresent the determinations and relations of the problem at hand and merely pursue contradictory solutions — but the hope for a re-regulated Keynesian welfare state itself is a contradictory solution. After all, what is the nature of these contradictions? Alongside the large Pacific circulation of deficits there existed a smaller European system of deficit circulation for which the euro was initially designed — and in a manner directly shaped by German interests. More than forty percent of the immense German export surpluses ended up (and still do) in the European Union and in particular in the eurozone. These surpluses confront the deficits in trade balance of other (in particular southern) E.U. nations. These nations were outcompeted with the help of the euro, since the potential for equalization via the devaluation of national currencies no longer existed. Since now everywhere the relatively weak reanimation of the deficit economy is based on the displacement of the problem from the finance bubble economy onto state credit, the state deficits of the neighboring countries constitute the flip side of the German export economy.

German elites do not want to recognize this relationship and refuse to surrender their supposed export advantages. Connected to the currency union in this respect is the fact that Germany (not only since Hartz IV)supports the largest low-wage sector in Europe and that the real wages in Germany, with the help of silent unions, have dropped faster and to a greater degree than elsewhere.1 The constantly growing export surplus on this basis has resulted in a relative capital strength of Germany. Now, however, the business foundations of this model are being questioned. Within the European Union we are witnessing a growing conflict between Germany and the deficit countries. Also on the larger scale of transnational relations the positions of economic policy have been reversed. The United States, as the biggest deficit nation, demands just like the southern European nations that Germany abandon all saving policies and instead stimulate national consumption in order to erase imbalances. We are confronted with a world that has seemingly been turned upside down: the former champions of neoliberalism now demand diametrically opposed economic policies and take on the role German unions feared to play. This may initially seems like a development in line with hopes for Keynesianism, yet it is nonsensical insofar as this would force the inflationary option. Like the IMF, the United States and members of the European Union flirt with a supposedly “controllable inflation” in order to address the dilemma — yet, given the current economic situation, such control would be lost very quickly.

There is thus no escape from this dilemma. Secretly, the elites of course know this. The spuriously explained resignations of high-ranking political functionaries, most recently German President Horst Köhler, are an indication that a severe conflict is carried out behind the veil of professional optimism. This is likely to be repeated in other nations. A classic wait-and-see strategy when confronted with problems (as per Helmut Kohl) is no longer possible. As a result, one repair program follows the next in rapid succession while still having to keep in mind the demoscopic will of the voter (if we are not to descend into a dictatorship of a state of emergency), thus resulting in general conflict and aggression. The capitalist mode of production must not be called into question, and, as a result, similar to the first stage of the financial crisis, discussions are determined by the hunt for those who are at fault. In fact, the conflict in the CDU/FDP-led government in Germany is not party-specific but instead will, given the current problem, likely occur with any given form of coalition. It is no wonder that some combatants have thrown in the towel.

In your estimation, what will happen in the foreseeable future?

Since the monetary measures and fiscal strategies of economic policy are immanently contradictory, we can expect a second wave of the global economic crisis within the next few years. This second wave could be triggered by the crisis (and potential breakdown) of the European currency union. Formally, the situation in which Greece currently finds itself is similar to that with which Argentina was faced a decade ago. But that crisis was limited to a single nation and thus largely left the global economic system unaffected. The threatening national bankruptcies in the eurozone are quite different in this respect, since they have the potential to undo the entire currency union. The collapse of European deficit circulation would shatter the German export economy, and the strength of German capital would be lost. This would not only mean that the hitherto-deferred major bankruptcies and massive job loss would also take place in Germany, but also that German state finances (which are also based on large amounts of debt) would be in a situation similar to that of Greece, in which, after the collapse of one-sided export relations, the strength of finance markets would disappear. Such a development would not only be disastrous for the European region but also, given Europe’s economic importance for the world system, for the global economy.

The situation is equally dire for the large Pacific system of debt circulation between China and the United States. In this context, each side hopes that the other side creates the preconditions for further stabilization. The state-sponsored bailout and stimulus packages on the part of the United States did manage partially to halt the collapse of consumption, yet without reaching pre-crisis levels and at the cost of calling into question the United States’ status as world power, since the externally financed state credit system and its role in financing the war machine and war efforts had reached their limits. The United States demands of China a long-overdue appreciation of its national currency and, as in the case of its demands directed at Germany, credit-financed strengthening of national consumption in order to reduce the imbalance of commodity flows and to strengthen the United States’ own exports, which in turn is hoped to compensate for the United States’ weakened national consumption. In most industrial sectors, however, the United States simply does not have the necessary export capacities, and their development would require vast investments. Conversely, China’s corresponding capacities would have to be dismantled, since U.S. corporations, just as European and Japanese corporations, have invested heavily in these capacities (due to cost advantages) in order to supply their own and foreign markets.

But China shows just as little interest in surrendering its export advantages based on low wages and an artificially depreciated currency as Germany, since in both cases the entirety of the economy is oriented toward one-sided export. A change which would have to take place over the course of a year or maybe even decades, however, would quickly reach its limits, since imbalances were the very life elixir of the global economy. China has developed the largest state-sponsored economic program of all nations and all times by basing it on its gigantic fund of monetary reserves and forcing its banks to give out massive credits. But precisely for this reason it cannot allow any serious currency correction, since this would substantially devalue its accumulated monetary reserves. The Chinese economic programs strengthen national consumption only indirectly and not to the extent necessary, and China is therefore not able to lead the world economy in the same way the United States’ foreign-financed consumerism did up to this point. The largest part of China’s programs flows directly into additional infrastructures and the development of production capacity, which are all directed at the same goal: restarting the one-sided export machinery. If this does not succeed, China will be left sitting on a mountain of investment ruins with corresponding consequences for the financial system. Moreover, China will not be able to survive such a program and simultaneously continue to purchase U.S. government bonds to the same degree that it did in the past.

In the Pacific region, therefore, the European dilemma is repeated on a larger scale. Deficit circulation is continuing more slowly after the crash, and is flanked by arduously reanimated national economies based on state programs. If the latter run out, the entire system threatens to collapse. The second wave of the global crisis can begin in either geographic region (or possibly even in both simultaneously). All current success stories are only momentary impressions that are falsely taken as a basis for extrapolating years into the future — just as during the peak of the global deficit economy between 2007 and the summer of 2008. Yet, in this current context, the projected success and numbers are even less credible than in the past, since they assume a much lower basic level after the crash of the global economy. This seemingly unshakably positive form of thinking is heading for its next Waterloo. The only question that remains is which incubation period and which new configuration of contradictions will be necessary this time in order to undo the system. The only consolation that remains for such positive thinkers will likely be their own characteristic short-term memory, whose horizon does not extend beyond their own noses.

What forms of mediation can be established between the immanent struggles for basic conditions of survival and the critique of the basic categories of the capitalist system (commodity, value, money, abstract labor, state, politics)?

Without a doubt, extraparliamentary, organized social struggles for the material and cultural necessities of life as resistance against the brutal lowering of the level of civilization is the only alternative to the Left’s political, parliamentary complicity in state-sponsored crisis administration. A newly constituted social countermovement will be equally indispensable, initially in the form of the immanent attempt to work through contradictions, which will not delegate its needs and demands to the state but instead advance autonomous demands, even if those are made of the state. Central topics here include adequate minimum wages, resistance against increasing cuts to social transfers and against the repressive chicanery and compulsory programs of labor administration, resistance against privatization and the demolition of vitally important public infrastructures (including, for example, health care). Additionally, this would involve serious engagements with the important question of funding education and the process of questioning the accepted practice of chaining education and research to capital’s needs for valorization, which have become obsolete.

An important moment in the mediation of “categorical critique” consists in the ability to learn how to distinguish between progressive and affirmative forms of working out contradictions. This includes in particular the realization that a defense of the fundamental necessities of life by party-political means has become entirely illusory. The content of the alternatives has to be developed out of direct social demands on one hand and the vain hopes for new state economic programs and new capital investments on the other. The latter instantly ties social needs to the “successful” valorization of capital on the rapidly eroding basis of abstract labor and to the ability to be financed according to capitalist criteria. The former, in contrast, can lead to a negation of the terror of “financeability” and to the possibility of surpassing the value and money forms. This alternative can, if it is put into practice, also be raised within the “Left” wing of the political class, where it would lead to polarization. Elements of these alternatives already existed in the workers’ movements of the past, but against the ideological backdrop of abstract labor. It was precisely for this reason that social countermovements were always transformed into state-oriented movements (in accordance with their own labor-ontological consciousness) and qua party-Marxism limited to a state-capitalist politics of intervention — after all, the state is the subsuming social entity based on abstract labor. The limits of abstract labor and real valorization of capital today force the question of the alternative of social countermovement and statism in an entirely new direction, which thus demands to be formulated with greater rigor (at a moment at which the hope for state credit does not contain any social potential and can only lead to the embarrassment of unleashing inflation).

A second moment of mediation is the critique of all forms of social segregation, whether these are articulated openly or indirectly. As long as social movements operate upon the plane of an immanent working-out of contradictions there will always be such tendencies. Already in the traditional labor movements there were at work a series of affects articulated in opposition to the unskilled lowest classes. Today, we encounter similar attitudes in an (albeit shrinking) globalized labor-aristocracy that stands opposed to those dropped by the system or to those employed in low-wage sectors, as well as in the attitude of any given “dominant culture” to its pool of migrant workers. Most important here, however, are the academic and subacademic middle classes in the capitalist centers, who, faced with the threat of their social and economic decline, attempt to save their own skin and formulate their own specific interests as “human capital” in stylized fashion in relation to the general ideal of emancipation, in truth ultimately caring little about the existence of “others.” To the extent to which a social countermovement constitutes itself, one of its duties must be a categorical critique of and the attempt to analyze and oppose the various potentials for social segregation, which intersect in complex fashion.

This will only be possible if such a critique communicates that it is in fact easily possible to provide the basic necessities of life for all if we are not bound by capitalist categories. In this respect, it is the duty of social countermovements to illustrate the immense discrepancy between the potentialities for material wealth and the impossibility of continuing to limit such potentialities to capitalist forms. Even if the theoretical reflection of the actual capitalist categories — value form, commodity, surplus value, and abstract labor — and their state-political modulation are not present in mass consciousness, practical experience of the existence of capacities for the satisfaction of material, social, and cultural needs that exist practically, technically, and materially but are rendered inaccessible by capitalism can still be mobilized — in particular at the moment at which the absurd end in itself of the transformation of labor into more labor and money into more money no longer functions. As more and more people are becoming homeless while simultaneously scores of homes and apartments are left vacant, as more and more people in need of medical support and care are inadequately attended to while doctors, caretakers, and nurses become unemployed, such experiences can form the basis for a fundamental, radical critique of the commodity and value forms, which would add a theoretical dimension to already existing reflections.

Such a strategy is appropriate, too, when considering the so-called ecological problem (climate change, exploitation of nature, and the erosion of the natural basis for life). The mediation of a categorical critique consists in this case in the attempt to foreground the internal connections (and resultant limitations) of the destructive potential of the capitalist production of material wealth on one hand and the capitalist forms of social relations on the other. It is not the production of sufficient amounts of food and cultural goods itself that led to the destruction of the biosphere, but rather the rationalization of the logic of valorization via business administration that simultaneously generates poverty, robs itself of its own foundation, and destroys nature. The destructive potential of specific capitalist forms of material wealth (traffic and transportation, armaments industry, agricultural industry, and so on) must not be privileged over the socialization of necessities of life. The alternative to making everyone “auto-mobile” is not the liquidation of mobility per se but instead the development of public transportation under social control in opposition to privatization. It is particularly perfidious in this context to present people who are impoverished by capitalism and subsist merely by means of insulting emergency rations with calculations that accuse them of overconsumption and resultant damage to the environment. While only recently the “climate catastrophe” occupied a central role in public discourse and the news media, the current crisis has led to the widespread repealing of recently established ecological programs, since the capitalist form must be preserved at any cost. Yet it is, of course, entirely possible that the crisis managers will seek further social reductions and legitimate their necessity by appealing to the ecological argument. This contradiction also determines a part of the ecological ideology that corresponds to sections of the middle classes, which speaks of the limits of capitalism only in the sense of an external limit of natural resources while the internal limit of abstract labor and the valorization of value is only recognized in a foreshortened manner (the limits of economic growth), since those sections of the middle class desire to participate “ecologically” in the administration of the current crisis. From the standpoint of a developed critique of political economy this ecological reductionism must be critiqued just like the economically affirmative temptation of crisis Keynesianism.

An additional step toward the mediation of categorical critique would be the return to a discussion about social planning that refuses to be limited to abstract labor, the commodity form, and the state. As an inheritance of the previous epoch, socialism is currently more than ever equated with statification, which leads to paradoxical expressions such as “finance market socialism,” which denote nothing more directly than the real paradoxes of the new relations of crisis. For a true transformation beyond capitalism, however, the main activity consists in the new organization of the global flow of material and social resources as such and in the refusal to represent it by means of the categories such as value and labor substance, which have become historically obsolete. Included in this is the problem of the moments of social reproduction that could never be contained and subsumed by the categories of abstract labor and that were historically delegated to women (child care, health and social care, domestic and affective labor, and so on). This “social mortar,” too, begins to crumble as we reach the limits of the valorization of capital. Any social transformation must also reorganize these aspects anew, reject their gendered logic, and instead organize them by means of a social time fund, which has long been possible. Moreover, a broad social discussion must be started that includes a wide variety of experiences and competencies without restricting it to a single, narrow theoretical focus. Theoretical critique can only attempt to stimulate such a discussion by means of highlighting the development of crisis and to foreground the key problems in regards to social planning.

Particularly since a categorical critique of capitalist formal relations cannot, despite the historical crisis, be mediated without experiencing moments of breakage as it reaches the limits of what Marx calls the objective forms of thought corresponding to social consciousness, it must not limit itself in a bourgeois sense to a politically and economically narrowed, “objective” line of argumentation. A crucial moment of such mediation is also a radical critique of ideology. All affirmative forms of processing the crisis on the level of consciousness produce ideology (not only in statist orientations or ecological reductionism). All modern base-ideologies such as nationalism, antisemitism, antiziganism (most notably the resentment directed against the Sinti and Roma as the pariahs of modernity), and sexism are amplified and newly configured in the context of the current crisis. The backdrop of this is the aggressive defense of the respective capitalist existence of social strata engaged in violent competition. Central in this regard is the current ideology of the “new middle classes,” which in the context of the crisis are engaged in a struggle for hegemony. The different elements of ideology production here often experience a process of (at times indirect) amalgamation. It is the job of categorical critique, therefore, to analyze the modulated dispositifs of ideology production and to explore the concept of ideology beyond traditional Marxism in order to connect the program of social transformation to a program of ideology-critical intervention. The current “movement Left” and its theoretically disarmed focus on largely symbolic struggles is far removed from all this. It is in part for this reason that we can increasingly observe sinister conversions of left to right positions in the context of an abbreviated critique of capitalism.

What role can class struggle in the Lukácsian sense play in the process of spreading class consciousness?

A traditional understanding of class struggles can, in this new situation of a confrontation with the absolute inner limit of valorization, no longer be mobilized. Historically, the representation of the proletariat by unions and political entities was no different from the representation of self-affirmative “variable capital” and therefore the representation of abstract labor. This depended on the construction of a merely relative opposition of the putatively transhistorical, anthropological principle of labor and the juridically construed form of capitalist private property, while abstract labor and juridical private property of the means of production in reality only constitute different formal determinations within the common, overarching system of relations of the valorization of value. Marx described this overarching relation as the “automatic subject” of modern fetish society, which contains all social situations as functions of the logic of valorization. There is no ontological principle upon which social emancipation could base itself. Instead, capitalism must be surpassed solely by means of a concrete, historical critique of its basic forms. Class struggle was first and foremost a struggle for recognition based on capitalist categories. For this reason, the workers’ movement adopted from Protestantism and the bourgeois ideology of the Enlightenment not only the ontology of abstract labor but also the ontology of capitalist gender relations, that is, the historically assigned categories of masculinity and femininity. That which surpassed the struggle for recognition (right to strike, freedom of coalition, freedom of assembly, right to vote, and so on) still only led to a further statification of the unsurpassed categories of capitalism. In this, the understanding of socialism within the context of class struggle exhausted itself.

In the new historical situation, the demand for the recognition of those who depend upon wages has long been granted and in fact becomes a bond and trap for the citizen-subjects of a fetish society. For better or worse, humanity is tied to valorization-compulsion. This is not only a matter of consciousness, since the social basis of the class struggle of old is also eroded objectively. Part of the conditions of the third industrial revolution is capital’s inability to assemble armies of abstract labor. Since the process of individualization as a phenomenon of crisis destroys the social filters, the socially atomized subject relates directly to the global value-relation, which is simultaneously virtualized in the form of bad debts and therefore becomes obsolete. It may appear as though a variety of diffuse social situations have been created that can no longer be integrated into capitalist categories. Temporary workers, the underemployed, the transfer-dependent unemployed as objects of crisis administration, the pseudo-self-employed, and owners of impoverished small businesses do not constitute the homogeneous mass of a surplus-value-producing proletariat. The movement ideology of the 1990s adopted the notion of such “diversity” affirmatively and assembled it purely notionally under the category of the multitude. The new organization of social struggle, however, cannot consist of the desire to be recognized as surplus-producing entity, but must instead concern itself with the critique and transformation of value as category and its associated gender relations. The basis for this cannot be a predetermined capitalist organization of labor which will be dissolved and demoralized, but the self-conscious organization of a concrete, historical critique of predominant categories that emerges out of the immanent working-through of contradictions. This is, therefore, not a question of objective class constitution as the representation of variable capital but instead a question of consciousness — yet not idealistic consciousness along the lines of a moral-philosophical ethics, but a consciousness that confronts the historical limits of valorization and the deterioration of the level of civilization.

At this point it is important to return once more to the problem of the crisis of the “new middle classes.” The unorganized state of the industrial armies of labor and the deterioration of the traditional labor movement coincided with the ascension of skilled middle strata during the phase of Fordist prosperity. The economic basis for this was not the immediate, actual production of surplus value but the expansion of state credit. The associated social self-consciousness consisted less in the ontology of labor as in the status of the “human capital” of higher education. The New Left that emerged since 1968 was already largely a middle-class movement, even if it sought in vain (in abstract-ideological fashion and out of a commitment to the traditional Marxist fund) a connection with the disappearing class struggle of the proletariat. In the era of finance bubble economics, the new middle classes became increasingly dependent upon the expansion of private credit and thus experienced steadily growing precarity. In particular in this process the worldview of middle-class consciousness assumed a dominant position (also on the Left). Revivals of traditional class-struggle rhetoric and in particular their derivatives in the form of the post-workerist multitude are all implicitly (and at times even explicitly) formulated from the perspective of the categorically affirmative consciousness of the middle class. Today, it is not mainly the long-eroded ontology of labor that blocks the transformation from the Marxism of labor movements to categorical critique, but the ideology of the middle class that continues to insist upon its human capital as the basis of a variety of theoretical models and movements. Since a large-scale, social countermovement must also include the middle classes, transcending this ideology is of the utmost importance.

The problem of an organization of social struggle that must integrate the desperate “diversity” of social strata beyond the class-struggle paradigm in altered fashion theoretically does not depart from ground zero. The transition to categorical critique can be found in the work of theoreticians at the boundaries of traditional Marxism such as Georg Lukács (and in a different way in Adorno). Lukács may have provided the earliest indication of this in the essay on reification. As is to be expected, given the historical situation out of which the essay emerges, he connects for the first time the implicit ontology of labor and the class standpoint that emerges out of it to the thematization of the constitution of the modern fetish that spans social strata. Of course, Lukács let himself be convinced by party Marxists that his groundbreaking insights were idealistic and returned to an explicit and rather boring ontology of abstract labor in his later work. Yet, his 1923 work has also been recognized by new approaches to a categorical critique since the 1980s, in particular with regard to the consideration of an “imputed class consciousness” and of the proletariat as “subject-object of history.” A new reading of this part of Lukács’ work in the context of the current situation generates surprising insights. What he collects under the category of reification constitutes a critique, unparallelled for its time, of capitalism’s basic forms — indeed, some passages read like an anticipation of postmodern thought. Important here is the postulate of a critical “coming into consciousness” of the commodity form as capitalism’s universal form of being, including the integration of the commodity labor. The result of this is that Lukács is able once again to approach the Marxian determination of capitalist categories as simultaneously both actual conditions of existence and objective forms of thought that had been overshadowed by labor-movement Marxism.

If one dissociates this approach from its attribution to the standpoint of labor, much can be adopted for a new categorical critique under the conditions of individualization and the deterioration of the relations of value. Of primary importance in this context is the attempt to integrate modern gender relations (which Lukács’s work does not address) into the categorical plane. Furthermore, the critical relativization of proletarian class-consciousness as it is laid out in the essay on reification must today be primarily examined in relation to the middle class. Our project, in other words, is the reformulation of Lukács’ insights in the context of a fundamentally different historical situation in order to energize the critical “coming into consciousness” of the commodity form for a reintegration of social struggle beyond capitalist false objectivity.

How would you define a concept of revolution suited for the current historical situation that is able to break with fetishism and with an everyday life that is completely subordinated to the reproduction of capital?

The term “revolution” is historically determined via the paradigm of the great French Revolution, the subsequent bourgeois revolutions of the nineteenth century and the revolutions of recuperative modernization at the periphery of the global market in the twentieth century (Russia, China, and the Third World). In this context, the revolution was limited to the political form of a seizure of power and in the twentieth century to the statification of capitalist categories. Consequently, the term belongs to the history of the development of abstract labor, the logic of valorization, and modern gender relations — and for this reason, the term’s career appears to be over. In the context of “remainder Marxism” and movement ideology the concept no longer plays a role in the act of political transformation — but this throws out the baby with the bathwater. By retiring the concept of revolution without reworking it in relation to the current historical context, the Left has ratified the terms of its surrender to the social basis of the middle classes.

Already in his early writings, Marx criticized politically limited variants of the term “revolution.” For him, a “social revolution” was qualitatively different, since it was aimed at the abolition of the political form of the state along with capitalist value relations and the commodity form. As later in Lukács, such a transformation naturally still took the shape of a proletarian revolution. Yet, precisely this paradigm has remained stuck at the stage of a politically abbreviated conception of revolution. Beyond the ontology of abstract labor, the internal limits of valorization and the question of social revolution take on a new and different quality, and the latter must be defined as the transcendence of the currently dominant social synthesis in the forms of value and capitalist gender relations. “Social synthesis” here means nothing other than the specific form of socialization in the sense of a negative totality, which can only be surpassed by means of a total social transformation.

Especially for this reason a new social movement on a transnational scale is necessary in order to begin the process of transforming the social synthesis. Occupations of factories by workers are, therefore, in no way sufficient, since these workers merely reify their status as a collective subject of capital, thereby remaining at the mercy of the synthesis via the market and competition. All past attempts at transformation (as, for example, in the case of the great crisis in Argentina) failed for this reason. Transformation is not possible on the plane of singular units of capital or particular units of reproduction. Instead, the question of synthesis and the associated forms of social planning beyond the commodity form must form the beginning (and not the endpoint) of any practical break with capitalism. Consequently, the concept “revolution” is not simply without substance, even if it no longer bears any relation to the old political definitions of the term. Critical theory as categorical critique must insist upon the point of social synthesis, also in opposition to purely symbolic movement consciousness, which refuses to address this key problem.

The post-workerist movement-Left today (including, for example, John Holloway) enjoys talking about the desire to change the world without seizing power. In this context, the critique of social synthesis is replaced with the diffuse notion of the “quotidian,” which was already popular in the movement of 1968. What is frequently designated as a revolutionization of the quotidian in one way or another always accompanies social change, but, reduced to this facet, such change can also include any given cultural adaptation to capitalist dynamics. Corresponding concepts of the movement of ’68 and the postmodern Left have long been absorbed into capitalist crisis management, as exemplified by the neoliberal propaganda that foregrounds individual self-responsibility. The thematization of the quotidian can neither replace real interventions on the plane of social synthesis nor is it able to render superfluous the forms of power necessary for such an intervention (such as strikes, blockades, and the disruption of capitalist nerve centers). The question of power is in no way limited to the paradigm of state power, but it must emerge with particular significance and urgency in the context of resistance against crisis management and administration. In reality, the quotidian is not itself a pool of resistance — in fact, such assertions render the latter term hollow and useless. Resistance, on the contrary, begins where individuals raise themselves out of the pool of the quotidian that is everywhere determined by capitalism and by doing so become able to organize in the first place.

The Left metaphysics of the quotidian in essence constitutes a continuation of the failed alternative movements of the 1980s as well as a continuation of attempts pragmatically or in neo-utopian fashion to legitimate “other” forms of producing and living on a small scale within particular communities. Such attempts, as in the form of so-called “local economies” or the digital open-source movement, are also unable to reach the level of social synthesis, just like occupations of factories. As pseudo-alternatives to a social resistance movement that emerges out of capitalist immanence they threaten to transform into the self-administration of poverty. As soon as even the thought of a critique of the commodity form appears, however, it is deconstructed to a form that no longer allows for such a critique without losing its decisive content and without resulting in hopeless contradictions. The supposed alternatives not only remain stuck in bourgeois contract relations, but they also solely address tiny segments of reproduction, which, as a whole, remain determined by capitalism. It is no surprise, then, that the particular “praxis projects” tend to aim for external financing through the state, be that in the form of basic income or communal sponsoring. Keynesian statism and alternative ideology are two sides of the same coin, and the common denominator is the direct or indirect orientation in the direction of state credit. This way, the disavowed dominance of middle-class consciousness shows itself once again. The Keynesian and alternative-movement lefts are forced to the same degree to deny and repress the new quality of the present crisis, since their illusions cannot survive the end of the global credit system and finance-bubble economy. They will have to confront the real limits of the predominant social synthesis at the very latest at the point at which the massive collapse of the global economy also reaches the quotidian in the capitalist centers.

  1. The Hartz reforms were the proposals put forward at the recommendation of the Hartz Commission, founded by the (Social-Democratic) Schröder administration in 2002 for the reform of the German labor market, and implemented between 2003 and 2005. The last of these reforms, Hartz IV, combined unemployment and social security benefits, at the (much lower) level of the latter, on a means-tested basis. [Eds.]