No capitalism is also no solution

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No capitalism is also no solution. The crisis of today's economy or What we can learn from Smith, Marx and Keynes is a non-fiction book by the business journalist and publicist Ulrike Herrmann , which was published in 2016 by Westend Verlag in Frankfurt .

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According to Herrmann, the neoclassical theory of the economy has become a quasi-religious dogma. The suppression of the real classics is also dogmatic: these are rejected as "outdated" and no longer taught. “Today's economy acts as if Smith, Marx and Keynes were yesterday - and they stay in the day before yesterday.” The mathematical models are constructed as if the economy consisted only of barter and as if industrialization had never existed.

“It may sound outrageous, but most economists have no idea what it means to live in a fully developed capitalism , where big corporations rule and banks create money from nothing. That is why these economists are always so amazed and overwhelmed when it comes to financial crises. "

In order to make the "adventure of capitalism" understandable again, Herrmann dedicates her book to his "cleverest theorists", above all Adam Smith , Karl Marx and John Maynard Keynes . She summarizes her biographies and one work each: The Wealth of Nations by Smith, The Capital. Volume I of Marx and General Theory of Employment, Interest, and Money by Keynes. These three would have answered the essential questions of capitalism: Why do financial crises occur? Why are the rich rich and the poor poor? How does money work Where does the growth come from? According to Herrmann, today's economists can no longer answer these questions. In two chapters she criticizes neoclassics from the beginning of the 20th century and the “current mainstream” of economics (there specifically Milton Friedman ).

Adam Smith

Adam Smith, declared the founding father of the economy by David Ricardo , was, according to Herrmann, thoroughly misunderstood by the "neoliberals". For example, he has already criticized the fact that social origin determines future chances. He therefore advocated a progressive income tax and compulsory schooling financed by it . "Smith called for an active state that took responsibility for the welfare of all classes."

He did not advocate either the laissez-faire principle or the night watchman state. Rather, he wanted to "free the state from the clutches of the privileged".

He had the entrepreneurship not idealized, but its "natural" Hang characterized by cartels and monopolies to restrict competition , the expanding markets and the laws of supply and demand and therefore the price formation excluded. Herrmann cites Smith's dictum that "people from the same industry (...) rarely meet, even for pleasure and for a change, without the conversation ending with a conspiracy against the public or a trick to raise prices" . According to Herrmann, Smith said that merchants would “collect monopoly prices” and thus, in Smith's quotation, “demand an absurd tax from the rest of their fellow citizens”. Smith saw very clearly that the English state had "long since become the prey of the ruling class".

Smith's real goal was to liberate the poor and exploited, not just for reasons of justice, but primarily because he was aware that the prosperity of the rich could only exist together with the prosperity of the entire population: "He knew that a society can only prosper if the lower classes also benefit. "

He recognized the disadvantages of the division of labor and, following Adam Ferguson , criticized the stupidity of work and the physical and mental stuntedness of the workers, on which Marx later could base his criticism of alienated work .

The only quotation from Smith about the " Invisible Hand " that neoliberals understand and misinterpret as the basic principle of his economic theory relates precisely to Smith's demand for free movement of capital. The Invisible Hand would ensure that entrepreneurs "do not migrate abroad, but primarily promote domestic industry, although they only have their own interests in mind".

The idea of getting rich through export and trade surpluses and imports of raw materials had shown Smith to be a fundamental mistake of mercantilism and a misunderstanding of economic life as a zero-sum game . Disenfranchisement and exploitation would always lead to a level of prosperity that is suboptimal for everyone involved. Profits could only increase with wages, because wages as consumption expenditures are again income of the companies.

He criticized the lack of representation of interests of the workers in relation to the concentrated entrepreneurial power.

Karl Marx

In her biography of Marx, Ulrike Herrmann puts forward the thesis that Marx, in his fundamental contribution, published in 1844, » On the Critique of Hegel's Philosophy of Right . An introduction « invented the proletariat as a revolutionary subject in order to win a radical actor for the upheaval that resulted from his criticism of religion. Religion, according to Marx, is "the sigh of the oppressed creature ... the opium of the people ."

"The criticism of religion ends with the doctrine that man is the highest being for man, that is, with the categorical imperative to overturn all relationships in which man is a humiliated, enslaved, abandoned, contemptible being."

In the same edition of the “French-German Yearbooks” there was also a contribution by Friedrich Engels , “Outlines for a Critique of Political Economy,” which Marx later took up himself. Both thinkers declared in 1844, according to Herrmann, their turn to communism . Engels was one of the first economists to have thought about economic crises.

In her summary of Marx's work Das Kapital (vol. 1), Herrmann says that Marx was “the first to define what constitutes capitalism at its core: money (G) is invested in order to manufacture goods (W); When they are sold, more money (G ') should then jump out, that is, a profit should be made. «Capital is not static, but a process. Technology played a central role in this constant process of realizing capital; Marx was the first to recognize this. But the "compulsory law of competition" leads to predatory competition in which only a few large corporations ultimately dominated every industry.

Herrmann analyzes three mistakes in Marx's theory: The impoverishment of the working class prophesied by Marx and Engels in the Communist Manifesto did not occur. Engels' confidante Eduard Bernstein had already discovered this in 1899. The cause was the gradual increase in real wages, which the unions fought for from 1880, and the resultant rise in mass consumption. The Marxian theory of surplus value contradicted his own observation that the rates of profit in all branches were equal, although the mechanization was very different. The labor value theory going back to Smith and Ricardo could not explain price formation and profits in times of industrialization (transformation problem). Marx's view of looking at money as a commodity could not explain the increase in the money supply through credit . Even the financing of railroad construction at that time remained a mystery to Marx. But these mistakes did not diminish his importance as the one who first saw and described capitalism as a dynamic process. Joseph Schumpeter also built on this knowledge .

John Maynard Keynes

For Maynard Keynes' "General Theory" his philosophical thesis that our knowledge is in principle uncertain played an essential role. Keynes dedicated his dissertation to her in 1907. Financial investors in particular behaved instinctively, as Keynes observed in 1908. In his pamphlet against the Versailles Peace Treaty in 1919, he pointed out the contradiction that Germany could only have earned the money for reparations through enormous export surpluses; but that would have been at the expense of the British and French economies. 1923-25 ​​Keynes fought in vain against the reintroduction of the gold standard of the British pound and the associated inflated pound rate. He correctly predicted the economic crisis and unemployment in Great Britain triggered by excessive export prices. However, the theory of interest that he developed in the work Vom Gelde, published in 1930, was practically devalued by the global economic crisis . During the Second World War , Keynes introduced the national accounts as a freelancer for the British Treasury and set the course for the calculation of the gross domestic product .

The central and new approach of Keynes' "General Theory of Employment, Interest and Money" was that, unlike the neoclassical theory, it deals with the "behavior of the economic system as a whole", with the entire demand and the entire investment . With that Keynes founded the new discipline of macroeconomics . Keynes assumed that the neoclassics could not have explained the mass unemployment of the Great Depression from 1929 with their market and equilibrium model. The cause is a mistake in reasoning: if wages fall, prices fall, and with them company sales; The relationship between wage costs and income would therefore remain the same as soon as all companies did the same.

Herrmann sums it up: "Keynes was the first to understand how money and production are related." He no longer saw interest as the market price for credit, like the neo-classics, but as an indicator of emotions such as confidence or uncertainty, and recognized that high savings rates are too Sales crises and thus unemployment. It is not the level of interest that decides whether entrepreneurs are willing to invest, but rather the return expectations of speculators. Keynes has banished the homo oeconomicus postulated by the neoclassics to the realm of theory, because in practice there is no calculable risk for savings and investment decisions because the future is in principle unknown, i.e. all decisions are based on mere assumptions and expectations. In order to avoid major sales crises in the future, Keynes called for government stimulus programs, a state sector of services of general interest and taxes on assets and inheritance to curb the power of the financial markets somewhat. State-owned money always immediately creates employment, while private-owned money can be withheld and withdrawn from consumption and investment.

Herrmann also goes into the so-called Keynes Plan for a world currency system after the Second World War, which unfortunately remained obsolete.

Reviews

Caspar Dohmen from Deutschlandfunk regards the work as valuable for any layperson who wants to get an idea of ​​the thoughts of a Smith, Marx or Keynes on the central mechanisms of capitalism.

Klaus Steinitz in Neues Deutschland considers it questionable whether Herrmann really penetrated the complicated, contradicting problems of the processes of the capitalist mode of production connected with money, surplus value and impoverishment. Keynes lacks a differentiated representation of the different directions. Herrmann unfortunately stops at the statement that ignoring the regularities of capitalist development, which is typical of neoclassics, can no more be a solution to the problems than retreating to the ideal world of an idealized microeconomy. “At least the question could have been raised whether and to what extent 'no capitalism' can be a solution. And it should not be possible to achieve an alternative democratic, emancipatory and innovative socialist society in a long-term transformation process. Precisely because there is no ideal world anywhere. "

literature

  • No capitalism is also no solution. The Crisis of Today's Economy or What We Can Learn From Smith, Marx and Keynes . Westend Verlag, Frankfurt am Main 2016, ISBN 978-3-86489-141-0 .

Individual evidence

  1. ↑ U. Herrmann, pp. 219-222
  2. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  3. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  4. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  5. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  6. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  7. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  8. ↑ Ulrike Herrmann: No capitalism is also no solution: The crisis of today's economy or what we can learn from Smith, Marx and Keynes . Westend Verlag, 2016, ISBN 978-3-86489-643-9 ( com.ph [accessed April 3, 2020]).
  9. ↑ pp. 88-90
  10. ↑ p. 91f
  11. ↑ pp. 123-126
  12. ↑ pp. 127-129
  13. ↑ pp. 130-132
  14. ↑ pp. 132-135
  15. ↑ pp. 136-138
  16. ↑ p. 161
  17. ↑ p. 166
  18. ↑ pp. 173-176
  19. ↑ p. 178f
  20. ↑ p. 180
  21. ↑ p. 181f
  22. ↑ p. 182f
  23. ↑ p. 187
  24. ↑ p. 185f
  25. ↑ p. 190f
  26. ↑ p. 193
  27. ↑ p. 199f
  28. ↑ pp. 201-204
  29. ↑ After the Financial Crisis - Saving Capitalism . In: Deutschlandfunk . ( deutschlandfunk.de [accessed on October 18, 2016]).
  30. ↑ Klaus Steinitz: No ideal world, nowhere (new Germany) . ( neue-deutschland.de [accessed on October 18, 2016]).