{"id":2087,"date":"2020-09-15T10:52:14","date_gmt":"2020-09-15T08:52:14","guid":{"rendered":"http:\/\/liremarx.noblogs.org\/?p=2087"},"modified":"2020-09-15T10:54:33","modified_gmt":"2020-09-15T08:54:33","slug":"profit-raten-on-coronavirus-and-crisis-michael-heinrich-juillet-2020","status":"publish","type":"post","link":"https:\/\/liremarx.noblogs.org\/?p=2087","title":{"rendered":"Profit raten: On Coronavirus and Crisis \u2014 Michael\u00a0Heinrich, juillet 2020"},"content":{"rendered":"
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\"\"Profit raten: On Coronavirus and Crisis \u2014 Michael\u00a0Heinrich
\n<\/span><\/span><\/span><\/h1>\n
Publi\u00e9 en anglais sur le site <\/span>Legal Form<\/a>. Un article publi\u00e9 initialement en allemand dans la revue konkret<\/em> (Profit raten: L\u00e4sst sich angesichts der Corona-Pandemie von einer \u00f6konomischen Krise reden?<\/a>). <\/span><\/span><\/div>\n<\/header>\n
\n

 <\/p>\n

Translated from the German by Alexander Locascio<\/em><\/p>\n

Ever since the coronavirus started keeping the world on edge, there have been arguments about how to interpret what\u2019s happening. [1]<\/a> From the far-right, we\u2019ve been getting primarily absurd conspiracy theories. Liberal conservatives such as the historian Paul Nolte [2]<\/a> regard it as the greatest rupture since the end of the Second World War, but have problems determining more precisely what the content of this rupture is.<\/p>\n

<\/p>\n

Leftists are also arguing over a political-economic understanding of the conditions created by the virus. For example, in konkret<\/em>, Justin Monday [3]<\/a> criticized the current crisis rhetoric by indicating that the deployment of labour-power is not being fundamentally called into question, but only deferred. And since the idle capital has not been devalued, one cannot speak of a crisis.<\/p>\n

The purpose of capitalist production, however, is not the mass deployment of labour-power; nor is it a good life for either capitalists or wage-labourers; rather, it\u2019s the production of profit: the type of profit that can be used to produce even more profit. A crisis exists when this purpose cannot be realized, which is the case at the moment. Not only is no profit being produced in many industries; losses are being incurred because there are also costs involved with idle capital (maintenance costs, storage costs, interest on loans used to purchase equipment, as well as wage costs, since not all employees can be put on short-time work), but hardly any revenues.<\/p>\n

The cause of the crisis is exceptional: production did not cease because too much productive capacity was built up in the hunt for increasingly higher profits, but rather because states, in reacting to the pandemic, shut down a large part of non-essential production. But was the crisis therefore triggered \u201cexternally\u201d, by a virus that has nothing to do with capitalism?<\/p>\n

Only in a few places on this planet does one find nature completely untouched by capitalist conditioning. The habitat of wild animals is becoming increasingly constricted, while the animals themselves are increasingly integrated into the circuits of valorisation, resulting in animal species that hardly encounter each other \u201cin the wild\u201d being crammed into animal markets. That in turn makes it easier for a virus to spread from one species to another. Factory farming is also an ideal breeding ground for the spread of infectious diseases. Unhygienic (cost-saving) working and living conditions make the spread of a virus easier when it has spread to human beings. Already, since the SARS pandemic of 2002\u20132003, it was suspected that similar pandemics with far greater numbers of victims were to be expected. The German government had precautionary plans drawn up, but these remained shelved.<\/p>\n

But it wasn\u2019t just the spread and transmission of the virus that were facilitated by capitalist production processes. How the pandemic developed in individual countries didn\u2019t depend solely upon the speed of state intervention, but also the extent to which health care systems had been destroyed by austerity. It\u2019s no coincidence that the USA has the highest number of victims, where a considerable part of the population does not have any health insurance and many more people are losing their health insurance along with their jobs.<\/p>\n

Many leftists who admit that we\u2019re facing a crisis never tire of emphasizing that the virus is not at all the cause, but merely the trigger of the crisis. There were already clear signs of crisis in 2019, they say; the financial crash was imminent anyway. While it is correct that already in the past year there were signs indicating a recession, that was anything but surprising after an almost decade-long boom.<\/p>\n

The production downtime enforced by the state accelerates already existing tendencies. Even before the coronavirus, for example, the situation was tense for most airlines, and it was clear there would be further bankruptcies and takeovers. In the automobile industry as well, the international process of concentration is far from over.<\/p>\n

Alongside the many losers of the crisis, there are also winners of the crisis such as Amazon, Apple, or Google\u2014the weights are shifting within the capitalist economy, but not in an unexpected direction. At the same time, the existing weaknesses of capitalist reproduction became clear\u2014and not just in the health care sector. It\u2019s not without a certain irony that over a century after Upton Sinclair denounced the working conditions in the slaughterhouses of Chicago, the meat packing industry in supposedly exemplary Germany is still good for a scandal.<\/p>\n

After an initial stock market panic, the big financial crash failed to materialize, and in light of the further billions that the European Central Bank (ECB) is pumping into the financial markets, it\u2019s also not to be expected in the near future, which doesn\u2019t rule out minor corrections due to profit-taking. If one now hears from various sides that securities prices are \u201ctoo high\u201d, that the stock market is \u201coverheated\u201d, this reveals a naive trust in the objectivity of economic indicators. What would be the appropriate relation of securities prices to profits?<\/p>\n

A further critique that has been made for years by both conservative neoclassical economists as well as by those leftists who suspect the next crisis around every corner, is the claim that the money brought into circulation so lavishly by the central banks will inevitably lead to inflation. Marx had already quite pointedly criticized this primitive theory of inflation: it\u2019s not the size of the money supply, but rather the use of this money which is decisive for the development of price levels. The money of the ECB and the US Federal Reserve (unlike the money of economically weak countries) can be used for many things; not only to buy goods worldwide, but also for investment in the financial markets, whose products are largely traded in euros and dollars.<\/p>\n

It\u2019s not just the central banks that are launching billion-euro programs; national states are also intervening with gigantic stimulus programs. Just like during the financial crisis of 2008, it\u2019s apparent once again that talk of the end of the nation-state is quite untenable. The EU as well does not constitute a trans-nationalization of the state in opposition to nation-states. This error is shared by right-wing opponents of the EU and left-wing EU enthusiasts. The EU is an organization of nation-states. The Council of Ministers, consisting of representatives of nation-states, has far more power than the European Commission or the European Parliament. And the 750-billion-euro European economic stimulus program proposed by Ursula von der Leyen, which for the first time foresees the pooling of European debt, still has to be approved by the member countries.<\/p>\n

However, national economic stimulus programs may prove decisive for the course of the crisis in individual countries. After the German government had already spent several billions on short-time work benefits, support for the \u201csolo self-employed\u201d, and so on, a 130-billion-euro program was decided upon at the beginning of June. At its core is a temporary reduction in VAT, which will cost around 20 billion euros. This is primarily intended to strengthen mass purchasing power, but presumably only a small part of this tax reduction will be passed on to consumers, so that in the end it will primarily increase profits for the retail trade.<\/p>\n

Nonetheless, this program in general was widely praised. Not only because the \u201cbalanced budget\u201d is now a thing of the past, but also because of what wasn\u2019t included: a general car-purchase premium, which would support the purchase of vehicles with combustion engines. A corresponding demand by the automotive industry, the fulfilment of which would have rendered absurd all efforts at climate protection, was also supported by the Green Minister-President of the state of Baden-W\u00fcrttemberg [home state of Daimler-Benz\u2014translator\u2019s note]. The Greens, once in government, are extremely flexible.<\/p>\n

But the \u201cgrand coalition\u201d [of the conservative CDU and the social democratic SPD\u2014translator\u2019s note] is not greener than the Greens; rather, it carries out the job of the \u201cideal total capitalist\u201d, as Friedrich Engels accurately described the bourgeois state. What state policy must strive for is not the satisfaction of the interests of individual factions of capital, but rather the long-term interests of capital as a whole as well as the integration of the subaltern classes. The German automotive industry, still the most important single economic sector in the country, is not well-prepared for the switch to electro-mobility that\u2019s coming in the next decade. Subsidizing an obsolete technology would be in line with short-term profit interests (and the interests of the labour unions in employment), but is a dead end in the long run.<\/p>\n

The various programs are not concerned with Green or left-social democratic pipe dreams, but rather with competition on the world market in the post-coronavirus era. So far, the Chinese economy has emerged most successfully from the crisis, while the US economy has been hit particularly hard\u2014although it also has its crisis winners. One consequence of the pandemic is likely that the gap will narrow between the economic heavyweights of USA and China. The EU states are affected by the crisis to varying degrees and are reacting accordingly. The aid for the economy mobilized by the German government alone, which comprises much more than the economic stimulus program with its 120 billion euros, amounts to almost as much as the programs of all other EU countries combined. The German economy is already Europe\u2019s strongest. In the future, its strength will increase relative to other European economies.<\/p>\n

Nonetheless, the German economy is dependent on the EU as a sales market\u2014almost half of all German exports are to other EU countries\u2014and the Euro would hardly survive the collapse of, for example, the Italian economy. Even more so at the geopolitical level, the German government needs the EU. In this respect, the 500-billion-euro program for European construction proposed by Macron and Merkel, and Germany\u2019s support for the EU Commission\u2019s program\u2014including the common EU debt, which is tough for German conservatives to bear\u2014owe their existence to an understanding of what is necessary for both German capital and the German state as an international player. The ideal total capitalist has learned some lessons, but that\u2019s far from meaning that it has become Green or social.<\/p>\n

Michael Heinrich\u2019s most recent publication is the first volume of his biography of Marx, <\/em>Karl Marx and the Birth of Modern Society<\/a> (Monthly Review Press, 2019). The second volume will be published next year.<\/em><\/p>\n

Alexander Locascio is the translator, in addition to various books by Michael Heinrich<\/em>, of Ingo St\u00fctzle and Stephan Kaufmann\u2019s<\/em> Thomas Piketty\u2019s Capital in the 21st Century: An Introduction<\/a> (Verso, 2017), and various essays in <\/em>The Berlin Reader: A Compendium on Urban Change and Activism<\/a> (eds. Matthias Bernt, Britta Grell, and Andrej Holm, transcript Verlag, 2013).<\/em><\/p>\n

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[1]<\/a> This article originally appeared as \u201eProfit raten: L\u00e4sst sich angesichts der Corona-Pandemie von einer \u00f6konomischen Krise reden?<\/a>\u201c (\u201cProfit Rates: Can We Speak of an Economic Crisis During the Corona Pandemic?\u201d), konkret<\/em>, July 2020. Profit raten<\/em> is a punning phrase in German\u2014Profitraten<\/em> means \u201crates of profit\u201d, while raten<\/em> is the infinitive of the verb meaning \u201cto advise\u201d or \u201cto guess\u201d.<\/p>\n

[2]<\/a> Cf. \u2018\u201cWe Are Going to be Working Through This Trauma for Decades to Come<\/a>\u201d\u2019, interview with Paul Nolte (Freie-Universit\u00e4t Berlin), 31 March 2020.<\/p>\n

[3]<\/a> Justin Monday, \u201eDas Virus und der Wert<\/a>\u201c (\u201cVirus and Value\u201d), konkret<\/em>, May 2020.<\/p>\n<\/div>\n

 <\/p>\n

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