In recent years the political scenery of modern capitalism was characterized by mass or popular parties – so called "Volksparteien" – and 80-90% of the electorate took part in the polls. Today we have to discuss the question whether or not parties are still the framework for mobilizing political progress. More and more people refuse voting: in France nearly 30%, in Sachsen-Anhalt, where the last votes in Germany took place, nearly 44%. Therefore the future of democracy, state and civil society is on the agenda.
All these political changes are linked to profound transformations in modern capitalism. How fundamental are they? Some suggest that a new model or a new stadium of capitalism has emerged. We can sum up three arguments:
First: Due to the gobalization of capital and the neo-liberal policies of denationalization and deregulation the nation state has lost it's power. Aglietta argues that the French-German welfare-state – the so-called Rhine-Capitalism – was beaten by it's anglo-saxon counterpart. According to Giddens keynesian or socialist approaches to intervene in the accumulation process are helplessly old fashion in the age of globalised capitals; his argument is that New Labour has to organize a better benchmark for the domestic corporations. And Toni Negri suggests that the nation state will not exist any longer – "Empire" is the name of the future.
Second: These transformations are seen as results of fundamental changes in the mode of production. In short: from Fordism to Post-Fordism – no longer based on the industrial sector but on servives and immaterial labor. Therefore the previous distinction between productive, reproductive and unproductive labor can no longer be maintained – as for example Hard and Negri point out.
Third: A new global finance regime has emerged where, in contrast to the controlled and regulated capitalism of the 1950s and 1960s, the shareholders play take dominent part.
Information and communication technology, as a cross-sectional and basic structure, plays a crucial role in all of these explanations. "New information and communication technologies on the basis of microelectronics, telecommunications and integrated computer software are the infrastructure of this new economy ... network-oriented information and communication technologies make possible a management of the economy that is unprecedented in its speed and complexity." (Castells 2001: 68) The new technological infrastructure is the result of the changes in the structures of the accumulation process. In short: Fordism was based on the regulation of wages, public investments and social expenditures. This wage-labor-society is overcome by a shareholder society – this is Agliettas top-argument. Post-Fordism is concentrated on the accumulation of financial assets, which leads to an institutionalization of investment management and a completely new financial regime.
To make my arguments clear: I definitely do not that the crisis of the Fordist accumulation regime has been overcome. And: although the nation state has lost power it's not eroded and definitely not transformed in Negri's Empire. I do not argue that nothing profound has changed in capitalism. The contrary is true: labour process and corporate governance are reorganized; the class-structure in the highly developed capitalistic society is transformed. But: these changes produce new contradictions: between the accumulation of real capital and financial assets, between production and solvent demand, between investment and macro-economic innovation. The potential of information and communication technologies cannot be fully exploited under these conditions. We are still in a period of deep transition – not in a post-fordist world.
The changes in economy and society caused by the information and communication technologies opens up a global action radius for investment capitalism. The extensive integration and digitalization of information and mobile communication not only changes the areas of material production but also affects most of the service sector and huge areas of social life."We have to differentiate two central effects of the information and communication technology: first the new products represent new goods through which income and wealth are generated and whose production leads to clear increases in productivity. Second, the spreading of the new technologies to other sectors also leads to an increase in productivity." (Stierle 2001, 15)
The use of information and communication technologies becomes the key factor for the entire economy. The speed of innovation will increase further. Modern information technology leads to an increased decentralization in the business processes and makes it possible to the international segments of the production process. We are registering a reorganization of the corporate landscape. The concentration on the core business reflects a radical change in the mode of production (Bischoff/Detje 2002).
The target is a "breathing factory" – as Peter Hartz, one of the chairman of VW in Germany calls it. "The breathing corporation, which follows the pulse beat of the market and can change over to four to six or even seven days of production overnight, uses market opportunities and risks optimally to create value. The break-even point in capacity usage remains low and market peaks can be taken as well." (Hartz 2001, 87)
When the production process becomes flexible, then working hours and working conditions must also become flexible. Not only on the factory level. The new "breathing rhythm" must also make headway at the social level: the time rhythm in society, the labor market, the educational system and the remaining institutions of the welfare state. Of course, the corporate management wants to use this flexibility to improve the capital gains. But, admittedly, if the risks are completely passed on to the wage earners, then the required quality cannot be achieved for a longer time. More intelligent management systems and forms of work organization will attempt to involve the employees. This is what Hartz suggests: "In the future, systems for self-organized work or project work, which learn to encompass work and communication and break from the Taylorist traditional figure of dependent wage labor, will increasingly emerge from the first approaches to time sovereignty." (Hartz 2001, 87)
The crucial question posed by the comprehensive penetration of information and communication technology is: If new qualifications and permanent further learning become decisive at the factory level and if new time regimes and new forms of participation are the preconditions for turning away from the obsolete Fordist-Taylorist work organization, do these correspond to social innovations in the educational system and in the whole system of social security (unemployment, health, old age compensation)? The radical change in the corporate landscape can only progress toward a new type of accelerated capital accumulation when the crisis of Fordism – which has persisted for several years – has been overcome.
The current lines of development point in a different direction: digital capitalism is by no means producing a "new economy", through which the contradictions of value creation and capital utilization would be weakened or even resolved. A new form of exclusion and social division is developing, which includes tendencies towards an authoritarian society. "Two-thirds societies are developing", says the former general secretary of the SPD, Peter Glotz. "The economically leading classes, thus the information processors and symbol analysts, co-opt the social classes that are capable of conflict. A two-thirds block is formed that lives quite well, even in luxury in the upper echelons. One-third remains, however, a new type of underclass." (Glotz 2001, 31)
But also the "normal employees" – defined by a good level of education, relatively secure jobs, negotiated wages and an income that allows a "little luxury" (in essence: holiday) – are affected by the flexibility.
The comprehensive penetration of the value creation process by information and communication technology intensifies the economic cycle, stimulates the formation of annuity and capital funds, destroys the social insurance systems on a pay-as-you-go basis and deepens the split between capital owners and employees without financial assets. The interests of the shareholders are concentrated solely on increasing the share prices and dividends. This value from the point of view of the shareholders, the shareholder-value, is the conditional breakpoint for the private and especially the big institutional investors. The yield to be obtained from a share of a company will be compared with alternative investment possibilities. The investment which promises the greatest yield will be selected." (Hickel 2001, 166)
At the same time it is conspicuous that with this domination of finance capital, not only the swings of the economic cycle become more apparent, but that we can also speak of a return to finance crises.
In the last two decades of the 20th century the shareholder value has become the dominant business philosophy. "In a nutshell this philosophy boils down to earning as quickly as possible as much as possible for the shareholders." (Kennedy 2001, 67) In the traditional companies, above-average profits are squeezed out at the expense of the employees, the suppliers and cooperation partners; innovations are forced even when investments in research and development are cut. That is short termism at it's worse which nevertheless supports the shareholder orientation. This policy of disposing of corporate substance cannot be kept up in the long run. The unavoidable "exhaustion" will lead to deeper recession and persistent corporate crises.
An aphorism outlines the new constellation for the corporations: the microprocessor brought a computer onto almost every desk and opened new dimensions of control and management of the transfer of value; the economist Alfred Rappaport delivered the theoretical tools for restructuring a corporation under the aspect of an increase in value. The logic of the maximization of corporate value was thus simplified and was easily applied. "As the shareholder value reflected in the share price could be measured and followed, it was suddenly possible – thanks to the introduction of this value as a measuring stick – to better call management to account. Below-average performance of many companies and management teams became suddenly visible.
The shareholder value orientation is not a mistake that could be replaced by an improved corporate culture or strategy. It signals a significant change in ownership and power relations. In the 1960ies, 84% of all corporate shares were still in the hands of private investors. At the end of the 1990ies, institutional investors controlled over 60% of the equity capital of the US corporations. Behind this change we see in turn two trends: on the one hand, private owners transfer their capital to investment managers or funds. On the other hand, the privatization of parts of the welfare state and tax reforms created new spheres of financial activities for pension funds. The managers of the funds and the professional investment managers constantly shift the stocks in their securities accounts according to the standpoint of optimal performance. This leads more or less to a short-term investment horizon and to pressure on the corporations to orient themselves on the shareholder value of the investors. It is not discernible that the power relations between real value creation and the appropriation of value by means of ownership and property titles will be subject to a new approach on regulation. On the contrary, the erosion of the wage-based social security systems owing to the high unemployment and the immense flexibility of social relations will continue further and thus the loss of importance of wage and social income (mass income). We have to find a political way out of the situation of low economic growth, high unemployment, destruction of the welfare state and increasing disparities in the distribution. The workers play a key role in such a process of comprehensive renewal.
The "breathing corporation" aims at a flexible work organization according to the ups and downs on the markets. The break-even point in capacity usage remains low and market peaks can be taken as well. This guaranties an above-average profit. The wage earners are – without participation on the profit – expected to act like co- entrepreneurs: "The employee-entrepreneur at the workplace takes the fate of his own employment in his hand." When production becomes flexible, working hours are flexibilized, then in the last consequence the "workholder" must subordinate himself to the pulse of the market and the cooperation. The contradiction is obviously: self- entrepreneur on the one hand, more subordination than even before on the other hand.
The big corporations are again forerunners with a new wage-, performance- and work-system. New sources of compensation are being established at the corporate level: profit sharing, contract payment programs, time securities, stock plans, virtual benefits, etc. In the society as a whole, a new system of social security which is capital-funded, would correspond to the model of an employee-entrepreneur. In Germany first steps have been made with the part-privatization of the state pensions and with the discussion about profit sharing – there are quite different views on this even in the trade unions. In the future, we will see efforts to shift the shares in favor of the capital-funded components. Correspondingly, this position strives for capital funding for part of unemployment insurance and health insurance. An incentive to increase the capital stock through "investments" in one's own employability and fitness would emerge in addition to the pay-as-you-go basic security.
Shareholder capitalism is based on a growing pressure to perform. The widening gap between the owners of wealth and unpropertied workers increases the instability of capital accumulation. The balance sheet made by Detlef Hensche, former chairman of one of the political most important trade unions in Germany, is very clear: "If we look at the wage policy of the trade unions in the last few years then we do not see a record of success. With few exceptions the wage agreements of the 1980s and 1990s did not even fully take advantage of the neutral scope for income redistribution, much less exceed it. This would have actually been necessary, however, to correct the disparity between mass income and profits." (D. Hensche 2002, 246) This means that the trade unions show clear weaknesses in their core function: the primary income distribution no longer ensures the safeguarding of the standard of living. Deficits can be perceived in the regulation of the working conditions and the working hours and above all in the framework of cooperation with European unions. If we also include the worsening of public services, old age insurance and the health care system – that is the field of secondary distribution – then the defensive position becomes clear. The vice-chairman of the IG Metall, Jürgen Peters, summarizes correctly: "Despite their efforts, the unions could not prevent the distribution from slipping into a social lopsidedness in the last two decades. ... The returns from investments ... increased more strongly than work income. This is one of the reasons that the relations in the distribution of income have shifted without the unions being able to prevent it with their pay rate policy." (Peters 2001, 331)
The correlation can also be inverted: in shareholder value capitalism the unions have to renew their wage policy by using their political mandate to ensure that the destruction of collective structures will finally be blocked. When both union members and the participants in social struggles and conflicts understand the mechanisms and contradictions of shareholder-capitalism and it's damaging effects on the entire social life, a hegemony change can become reality.
Bischoff, J. (2001): Mythen der New Economy, Hamburg
Bischoff, J./Detje, R. , (2002): Flexibel-marktzentrierte Betriebsweise im Shareholder-Kapitalismus? (im Erscheinen)
Castells, M. (2001): Das Informationszeitalter. Wirtschaft. Gesellschaft. Band 1: Der Aufstieg der Netzwerkgesellschaft, Opladen
Glotz, Peter (2001): Arbeit in der digitalen Ökonomie, in: NZZ 3.1.2001
Hartz, Peter (2001): Job revolution, Frankfurt
Heseler, Heiner/Huffschmid, Jörg/Reuter, Norbert/Troost Axel (Hrsg.) (2002): Gegen die Markt-Orthodoxie. Perspektiven einer demokratischen und solidarischen Wirtschaft. Festschrift zum 60. Geburtstag von Rudolf Hickel. Hamburg
Hensche, Detlef (2002): Wissenschaft und gewerkschaftliche Praxis, in: Heseler, Heiner u.a. (Hrsg.) (2002): Gegen die Markt-Orthodoxie, Hamburg
Hickel, Rudolf (2001): Die Risikospirale, Frankfurt
Peters, Jürgen (2000): Zukunft fairteilen, in: Gewerkschaftliche Monatshefte, Heft 6
Stierle, M.H. (2001): Neue Ökonomie, in: Beilage zur Wochenzeitung das Parlament, B 9