It's not (so much) about growth, it's about competition
Ulrich Thielemann
Kategorie: Kapital, Regulierung, Ökonomismus
Here is a short paper I prepared for the Conference «Growth in Transition», taking place in Vienna from 8-10 October 2012.
The problem
The problems we face are not about growth, but about competition, about unconstrained, »free« market forces. Growth is no instrument. Growth cannot be brought about, at least not directly. Competition can be brought about. But competition, the »process of creative destruction« (Schumpeter), is no neutral instrument. There are »costs« of competition, and thus of growth. Unconstrained competition, allegedly »creatively«, »destroys« a balanced way of live.
We live in the age of the economization of everything, and of economism, explicitly or implicitly justifying the economization of the economy, of society at large, of all our lives, and of politics. Even democratic decision making has become »market compliant« (Angela Merkel). Political autonomy is replaced by the mantra of competitiveness.
We are governed by anonymous market forces, the »invisible hand« (Adam Smith), which is more of a »hiding hand« (Jagdish Bhagwati). Behind this hand mainly lie the forces of capital (we all are, more or less, part of this force), which is the tacit »principal« (economic jargon) of the world.
By submitting to the insatiable demands of capital, »neoliberal« politics have give way to a gigantic bubble. The global debt burden (global financial assets divided by global GDP) rose from 109% in 1980 to 356% in 2010. The world is overstretched in fulfilling the demands of this tsunami of capital.
Two key questions of an ethics of competition
It is questionable whether we want to grow in order to raise our levels of consumption, or whether we are forced to grow in order to keep up with raising standards of competitiveness. The question is: Do we want to live an ever more »competitive« life? This question needs to be answered on the world stage, as on any single national stage, a nation, even an association of states like the EU, would lose its productivity base, resulting in massive unemployment.
Some people might want to live an ever more competitive life, and to raise their levels of consumption, others won’t. There are conflicts. Competition takes place between people, not on the moon or in econometric models. Therefore, the second, and more fundamental, question is: Should the more competitive market participants, empowered by capital, be permitted to force, via the »hiding« forces of global market competition, all others to live an ever more competitive life?
The vision: embedding the market and constraining its forces
Economic policy in many cases still is suffering from digital thinking. The question we face is not: should there be a market economy or not. Rather the question is: How far should we let the dynamics of an ever purer market logics reach?
The good economy is an embedded economy (Karl Polanyi). Embedding means: orienting and constraining the pure logic of the competitive market. Embedding takes place on two institutional stages.
On the stage of immediate economic interaction between people (within a firm, between buyer and seller) it means integrating values of legitimacy, responsibility, and meaningfulness, dethroning the principle of profit maximization in favour of mere profit making. Social entrepreneurship and the Commons movement are examples for such a revival of a social market economy on the intermediate level.
On the stage of the political framework, embedding means, first and foremost, restraining the power of capital and regaining political freedom, effectively answering the two core questions of an ethics of market competition. The key element here is a considerable reduction of the nominal amounts of global financial assets, by taxation and by write-offs.
