First it was the financial markets that were accused of lacking responsibility in the face of the crisis, then state finances. When they are at the end of their rope, the powerless can only come up with grandmotherly wisdom. Suddenly there is talk of deficit sins everywhere, as if this were a completely new discovery. We have lived beyond our means, they say. But what does that mean? If it were merely a matter of the misconduct of deficit sinners who have violated “proper” capitalism, then all those who can no longer service their debts would simply have to go bankrupt. This was the case with Lehman Brothers. But the consequences were so devastating that since then the due bankruptcies have been postponed by adventurous financial actions. First in the banking system, then in large corporations like General Motors, and finally in countries like Greece. Against the laws of the market, central banks are pumping more and more liquidity into the markets. In comparison, the announced austerity measures are just a drop in the bucket.
There is a simple explanation for this internal contradiction in government action. Debtors and creditors have always been in a relationship of mutual dependence. The debts of one appear as the credit balances of the other. Today, this relationship has taken on a historically unprecedented dimension. As the demise of Lehman Brothers has shown, any major bank failure threatens to trigger a global chain reaction. There is no longer a simple relationship between debtors and creditors; instead, the credit balances that have become fictitious serve in turn as pseudo-collateral for borrowing. All creditors are also debtors and vice versa. The Greek national bankruptcy had to be prevented because important major banks are sitting on hundreds of billions of dollars of ailing government bonds. The same applies to the bad loans held by banks, manufacturing companies and private individuals.
What no one wants to admit is that material production capacities have outgrown the social form of capital valorization. Therefore, the argument that we are now dealing with a socialization of losses at the expense of the taxpayers is insufficient. That would still presuppose an intact real valorization. In reality, however, the credit bubbles have become the fragile foundation of the entire world system as an anticipation of imagined future value creation. If one takes the social productive forces as a yardstick, then most people are living far below their means. While, according to international statistics, global mass poverty continues to increase, the existence of the much-vaunted middle class, even in the emerging countries, depends on inflated national and transnational credit. The currently acclaimed export boom in the automobile industry, for example, is based on this. Delaying a market shakeout with ever new guarantees and debt rescheduling is nothing more than an attempt to keep the productive forces locked into the logic of valorization, which has become insubstantial. But the holes in the financial system are only being plugged in order to tear open new ones. The next financial crisis is programmed by the postponement measures themselves, no matter where it starts. It is the capitalist mode of production itself that has long been living beyond its own means.
Originally published in Neues Deutschland on 06/25/2010
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