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Capitalism & Boundaries

Netzwerk Plurale Ökonomik e.V.
Level: beginner
Perspective: Other
Topic: Criticism of Capitalism, Labour & Care
Format: Infographic

"Flexibilization of the labor market" - this buzzword has dominated labor market policy worldwide in recent decades. The aim of this is usually to accommodate companies in distress by politically promoting so-called "atypical employment relationships" (temporary work, fixed-term employment, freelancing, commuting). In fact, however, this is often a spiral of precarization (Standing 2015): Because even traditional industries are increasingly suffering from competitive pressure from the so-called "new economy," their economic decline is being borne on the backs of workers through a relaxation of labor law ("flexibilization"). This can also lead to more self-determination in employment relationships, but usually it results mainly in the circumvention of socio-economic gains from labor disputes.

In this context, a tendency of the creative and knowledge industries has also become apparent in other fields, if they have not meanwhile become knowledge work themselves: Work is becoming more communicative, rather than easier or less so, with increasing technological development (Gregg 2011). In this context, work is dissolving boundaries in three ways: 1.) temporally, i.e., it is increasingly migrating into the realm of "leisure time," becoming urgent at all times with the constantly demanded and, with smartphones, also possible availability and the orientation toward project-based work. 2.) Work is also becoming spatially unbounded: work can and is done on vacation and from home, especially in the "knowledge economy. And 3) work is also becoming socially unbounded: the shift in many forms of work from hierarchical to team-oriented structures is not only leading to work relationships themselves becoming more intimate and friendly, relying more than ever on networks and social networking, but also moving into the interior ("the psyche") and demanding entire personalities (sometimes to the point of burn-out). However, it is important to note: It is not the work that is de-limiting itself, but rather it is being de-limiting itself. The calculation behind this is, as always, an increase in productivity, and this is increased today by more intensity in work relationships and correspondingly arranged work environments and management styles. The entrepreneurial self admittedly helps them to do this (Bröckling 2007).

But not only the labor market is under pressure, so is the welfare state. Since the 1970s, when there was an end to the war-induced economic boom (Piketty 2016), when there were also the first major oil crises, the so-called stagflation (i.e., a rise in prices/decline in values and an economic slump at the same time), the decline of heavy industry in the so-called "industrialized nations," public debt in many countries also rose to new heights. One solution, promoted in particular by neoliberal think tanks and economists, was to "liberalize" the financial market (Epstein 2005). Simplifying economic law, removing regulations, and loosening regulations on banks and the stock market were supposed to create a dynamic and self-regulating market that would be able to keep up with the increasingly globalized and technologized conditions of the late 20th century-or at least this re-regulation of the financial market (Mirowski 2013) was sold to politicians with this argument. The consequence of this: There was an ever more far-reaching expansion of the financial market, which not only produced ever more complex and opaque financial products that can affect even remote regions in China, food or the weather. But also the structure of the institutions running the financial market could change: For example, banks were no longer separated into investment and commercial banks, cartelization became easier and actors like rating agencies became more and more important.

At the same time, the globalized world of the 21st century shows that capital is more than ever able to circumvent the boundaries of the (legal) state: As the "Panama Leaks" have shown, among other things, capital can be transacted via tax havens in such a way that taxes can be evaded on a large scale. But not only taxes, but also real estate purchases and data protection issues can be easily circumvented and subsidies can be grabbed if letterbox companies and settlements of subsidiaries are used. At the same time, states, regions and cities are undercutting each other in offers such as tax breaks and land transfers to attract globally active companies. Their mobility is very high, especially in the "new economy," and their relocation elsewhere an ever-present threat.

Now, one might assume that liberalism (as a political and economic tradition) would have demanded mobility not only for labor and capital, but also for those of people. The European Union seems to be such an outcome: Is not the Schengen area the embodiment of the liberal ideal of free movement of goods, capital, and people par excellence?

In fact, even this area of apparent freedom of movement shows how problematic movement actually is in the globalized world. For when the Schengen area was first discussed by the EC states (FRG; F, B, NL, LUX) in 1985, it did not mean that borders were abolished. Rather, it was about containing border controls, at least within the Schengen area. The goal was thus not borderlessness, but a shift of security and control efforts to the external borders. At the same time, a common entry and asylum policy, cross-border police cooperation and the Schengen Information System were created for the "internal security" of the Schengen area in order to compensate for the privilege of non-control through information exchange, police armament and border security. In the process, the border areas became all the more important spaces of action for the police and security authorities, which are (or can be) little observed by the public. Freedom of movement (for some) was thus only available in exchange for more "security" (i.e., securitization) and "migrational profiling" (of others). Thus, the majority of EU member states, as well as other European countries, signed the so-called Prüm Treaty, which resolves "the deepening of cross-border cooperation, in particular to combat terrorism, cross-border crime and illegal migration." It legitimizes the automated transfer of personal data as well as DNA and fingerprints of people who have crossed external borders and allows such data to be shared with all security services of European countries. Similar to the United States, where the "war on terrorism" has served as a justification for tighter border controls and rigid migration policies since the days of George W. Bush, the phenomenon of borders is increasingly coming to the political forefront in Europe, especially pushed by right-wing populist forces. While leading politicians in Europe condemn Trump's vision of a wall, they at the same time support EU measures to tighten controls and surveillance of refugees (for example, through the projects of a "Smart Border") and the construction of fences, such as in Hungary, Austria or Spain. In addition, there are increased controls also within the Schengen zone and away from border areas, which particularly affect and criminalize non-white people ("racial profiling").

So, if we look at the results of liberalism in the 21st century, we can say: Globalization does not just keep advancing and tearing down borders or expanding freedoms. Liberalism had always surrounded itself with a nationalist undertone (so it was about individual freedom, but only within nation-state thinking, where competition among nations was considered the main key of prosperity). Neoliberalism has turned the liberal demand for freedom (of individuals to exchange freely) into competition of individuals (and the need for competitive pressure to make). So if today free trade is also in question (as seems to be the case with neo-protectionist policies), this is by no means a contradiction of the liberal or neoliberal tradition. Rather, there seems to be hand-in-hand competition among nations and individuals.


This text was initiated as part of a sticker campaign by the group Was ist Ökonomie? and produced for the Netzwerk Plurale Ökonomik. Many thanks to the Institut für Makroökonomie und Konjunkturforschung of the Hans-Böckler-Foundation for the financial support.


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