The real issue for Josef Joffe
Josef Joffe is the publisher and editor of Germany’s Die Zeit newspaper, a fellow at the right wing Hoover Institution in the United States, and an associate at the Olin Institute for Strategic Studies at Harvard. With great status and Seriousness, then, he struts forth today in the FT to solemnly inform the French, and by implication the rest of us, that “what is at issue is microeconomics”.
But of course that’s not remotely the issue; microeconomics is a fig leaf, a rhetorical device in the great fundamental issue: age old concentrated power, discipline, and oligarchy versus populist democracy. It’s quite easy to expose the fig leaf covering up Joffe’s true concerns by simply comparing his “micro” arguments against a reasonably objective, or at least democratic, “macro” view of reality.
He tells us that France should follow former German Chancellor Gerhard Shroder’s policies of nine years ago and reduce social benefits and “loosen” up labor markets (i.e. lower wages). These policies were a success, he says, because Germany’s growth rate increased afterwards.
A rational macro view though would clearly show us this is not at all a viable strategy for the system as a whole; in fact it’s pure quackery. If France and everyone else pursued his proposal, wouldn’t Germany then revert right back to where it was nine years ago? What then? Bring Shroder back for another round of benefit cuts and more “loosening”? Nothing could be more objectively clear; such competition represents a death spiral for all workers. Profits themselves wouldn’t necessarily increase either since wages play the dual role of both cost and revenue. Ever reducing living standards is the only possible outcome.
We encounter the exact same logic in the real world of corporate oligopoly competition. Large corporations could try to fight it out in a price war but it would clearly be futile and end up eliminating all profit. The companies therefore don’t compete on price and profits remain high. I can just imagine the reaction in the corporate boardrooms if Mr. Joffe strolled in and offered a price war as his solution for maximizing profits. No doubt he’d quickly lose his position at Hoover and Harvard and would also be branded a shill for worker interests. Joffe’s position is in fact ludicrous and only makes sense if it’s a tool for something bigger.
He continues by condemning the likely new French President Hollande for his proposals that would reduce the retirement age to 60, set a minimum monthly wage of €1,700, add tens of thousands of teachers, and increase taxes on the rich. But why are any of these ideas outlandish? Our technological productivity is enormous and can certainly provide enough goods for everyone to at least be guaranteed a salary of €20,400 per year, not very large considering the cost of living in France.
Of course he brings out the old “How Are We Going to Pay for This” argument but anyone remotely knowledgeable about money will realize that it’s utterly false; the European Central Bank could easily assure sufficient monetary finance by simply providing it to the states. Notice that those who use this deficit argument never talk in terms of the real economy; they can’t because it demolishes the whole pretense. In real terms, potential output is determined by the number of workers available and the state of technological productivity. In these terms of course, France can easily “afford” to add teachers and guarantee a minimal existence. Finance is nothing but a tool for suppressing democratic egalitarian actions.
But “France groans under a 56% government share of gross domestic product”! Such a meaningless statement. Would workers groan less if they were unemployed or if they labored under the direction of a global transnational corporation? The real groaning and the real issue is inequality and the whole world is groaning under the massive share of GDP coopted by the class Joffe shills for.
The article’s entitled “Hollande’s dangerous dreams of exceptionalism”. The dreams that are feared though aren’t those of exceptionalism but of a far more equal and democratic world order. Hollande isn’t a threat but the dreams sure are.