Research: Globalization poisons capitalism!

Research: Globalization poisons capitalism!

It is not capitalism that is evil, globalization and tariff reductions are. The change from tried-and-tested tariff protectionism to extortionate subsidy protectionism is plunging the world into an uncontrollable, exploitative and environmentally hostile casino capitalism.

Capitalism is not bad as long as you don't dumb it down or rape it.
Or perverted it with absurd ideologies or visions. Why has the concentrated competence of decision-makers and opinion formers (politicians, government advisors, economists, journalists) led to the world slipping from one crisis to the other and even in the German economic miracle land, real wages have been falling since 1980 (despite brilliant productive progress)?

The misery of life's lies...
How come it takes the "expert groups" forty years to recognize that the global economy is drifting into the abyss? The simple answer: Because politicians and the media have been brainwashed for decades and have proclaimed and parroted the greatest nonsense.

For example, that we owe our prosperity to the "international division of labor" or that the economy needs constant growth in order to thrive. Or that industrialized countries benefit from the exploitation of slave labor in low-wage countries. Or that total import and export dependence creates peace and promotes a global democratization process.

But all these claims and promises later turned out to be empty propaganda or wishful thinking. When there were still intact, independent economies, their prosperity rose rapidly - despite reductions in standard working hours. The assumption that global economic ties would bring about peace also turned out to be incorrect. And the democratization of autocratic states didn't work either. The opposite was the case.

It's not capitalism that's to blame, it's globalization!
It annoys me that capitalism and globalization are lumped together. Or even worse: that capitalism has to be used as a scapegoat. If governments don't act like klutzes, naives or idiots, capitalism is the best thing that can happen to humanity. Because healthy (not botched) capitalism leads straight to a prosperous, social market economy that ensures a fair balance of interests between labor and capital worldwide. Things look completely different with globalization. The tariff reduction implants the principle of global wage, tax, ecological and interest dumping and thus cements the omnipotence of big capital, corporations, speculators and investment funds. It's a bad joke to talk about a market economy in the face of tariff waivers (globalization, the EU). Because the stark wage differences alone (one euro hourly wage, twenty euro hourly wages there) are absolutely incompatible with a market economy. If a global market economy were to function, we would have equal real wages worldwide.

We don't need constant new ideas for sustainable capitalism, we just need to free ourselves from fatal heresies.
The popular demand for a 70 percent top tax rate, for example, sounds very charming, but in a free world it ultimately leads to our elites and cash cows leaving sooner or later. And the further expansion of cycle paths or heavily subsidized 9 euro train tickets do not change the underlying undesirable developments; they rather serve to disguise the symptoms. All these cheap ideas do not answer the question of counter-financing. They are based on the standard formula, which is: "Germany is rich!" . The anonymity of money creation becomes the program.

The exploitation of low-wage countries fuels the throwaway society...
Is it still to be believed: While some oil-producing countries make stupid and stupid money from their natural resources, dangerous ore mines in developing countries work for starvation wages. Just like on the coffee, cocoa, nut, tea, tobacco, banana, palm oil or cotton plantations. If a global minimum wage of eight to ten euros were implemented, our world would change completely. This would not only accelerate the rise of starving developing countries, it would also fundamentally change our western consumer behavior. The G20 states are so keen on international agreements, why don't they get involved in this direction? That would even make a large part of development aid unnecessary.

If textiles, ores, rare earths or luxury foods cost twice or three times as much due to fair wages, these resources would be used more prudently. Chocolate, for example, would once again become a luxury good, as in earlier times, while today it is considered one of the cheapest satieties of all. Eating and consumer behavior would fundamentally change, with positive effects on our health and quality of life. Fifty years ago, Western Europeans were on average less overweight than today, lived healthier lives and exercised more. Most people were able to do without their own car because public transport was well developed, they could afford an apartment near their place of work, and there was a corner shop just around the corner.

But what if international agreements (minimum wage of eight to ten euros) are not possible? Even 50 years ago, our politicians could have ensured that only products that were manufactured under verifiably humane conditions should be allowed into the country. Then, at least in Germany today, there would be no throwaway mentality, no sophisticated export and import dependency and no ugly parasitism towards developing countries. Our state would probably have become a shining example and could have proven that things can work without consumer terror and casino capitalism. But then the capital lobby would certainly have been upset if it hadn't "supported" some politicians or pampered parties with election donations.

Leading economic experts and historians have now come to the conclusion that Germany has been addicted to an export craze for decades and that alternatives are no longer available.
See also the article in SPIEGEL from December 30, 2023, page 56: "The Germans' pride in exports is irrational".

"Instead of 44% (in 1981), today only 8% of the world's population has to get by on less than $2.15 a day!"
Is this really such a great success that proves the benefits of globalization? First of all, how honestly was inflation priced in (if at all)? But apart from that - it was clearly the technological advances that made this macabre "economic miracle" possible. The most important question remains unanswered: How would the low-wage countries have developed without a tariff ban. In a fair market economy and with a little help from the "rich" industrialized countries, the prosperity of the poorer half of the world's population might have increased tenfold in 40 years (as in China), instead of only increasing by 75%. But politics has long been suffering from the fact that humanity is being made fun of with confusing number games (which even "experts" keep falling for).

Democratization, change through trade? Only 20% of humanity now lives in countries that are considered "free". 18 years ago it was 40%!

Hopeful, well-sounding slogans that waste limited time are ultimately also counterproductive...
An "economy oriented towards the common good" should actually be a matter of course, you don't have to specifically demand it. Above all, such warnings should not be sent to the wrong address: it is not the entrepreneurs who are responsible, but the state. It is easy for an independent (tariff-protected) state to write appropriate rules and regulations. There is no need for recommendations, requests or subsidies - all companies simply have to comply with the applicable laws. In an open, duty-free global dumping system, the call for an "economy oriented towards the common good" sounds pretty trite and quixotic.

Patent recipe for redistribution...
If politicians, "experts", leading media, etc. can't think of anything, they routinely pull the redistribution trump card. This standard populist formula is very well received by the majority of the population (because it involves false assumptions). The redistribution ritual has long been overexcited. Unemployed households are often far better off financially than struggling average earners.

Should this perversion be deepened? As long as Germany refuses to decouple itself from the foreign dumping system through tariffs, neither the rich nor the corporations can be made to pay more. Isn't the exhausted redistribution debate already serving as a distracting stalling tactic? Sham solutions are presented that distract from urgently needed reforms.

"We need the climate-friendly restructuring of the economy and industry!"
Yes of course. But why does this ancient insight still have to be sold as a revolutionary idea? The answer: Because the belief in the effectiveness of international agreements has allowed valuable time (half a century) to pass! Nothing against international agreements, but a general decoupling from global competition for undercutting would have been much more effective. If Germany had not maneuvered itself into total import and export dependency through tariff reductions, strict environmental regulations would have been able to be financed 50 years ago. Germany would have become a role model for many other countries. Without tariffs, however, the entire global economy was caught in the hamster wheel of global locational competition, which hardly allows expensive solo approaches and ecological common sense.

"You have to force companies..."
is what they've been saying lately (this insight comes rather late). But how to force? About absurdly expensive subsidies or about tariffs? If the USA had to support its economy with $5,000 billion during the corona pandemic alone (DER SPIEGEL December 30, 2022, p. 14), where will that lead? Into the total chaos of an endless flood of cheap money? Into hyperinflation?

"State funding instruments are indispensable!"
Can't we finally get rid of this small-minded way of thinking? "State funding instruments" are only necessary if you continue to stubbornly and unreasonably outlaw customs and absolutely do not want to decouple yourself from the global dumping system. In the intact cycle of an independent economy, there is no need for "promotion instruments", no deregulations and no floods of cheap money that drive the world from one financial crisis to the next.

A gradual increase in tariffs would lead to people gradually becoming more independent of foreign sales markets and foreign production companies returning to Germany. One day, fewer cars and machines will be exported, but solar systems, televisions, computers, textiles, etc. will be increasingly produced domestically. And no manufacturer could dare to blackmail the state by threatening to relocate its factories abroad. The fact that most of the industries in which Germany was once a leader have died out in this country was not due to German vices, but simply due to the stark wage gap! Even the most capable bosses and employees cannot compensate for wage differences of 1000%.

At its end, globalization requires a policy of expropriation of savings interest. This means that states and corporations finance themselves through a flood of cheap money (i.e. through the "printing press"), while savers no longer receive inflation-compensating interest. This system, based on manipulation and immorality, ultimately means the abolition of the market economy.

Our economic system is fundamentally wrong?
Oh really? Have you noticed after just 40 years of ignorance? Unfortunately, the errors are not where they are located. People are still trying to defend the anomalies of globalization (tariff-free trade) tooth and nail, globalization fetishists warn vigorously against any form of deglobalization. Instead of accepting the obvious (tariff rehabilitation), costly demands are plucked from the mothballs of diversionary tactics. More investment in education, infrastructure, equal opportunities, etc., how original is that? This is exactly what has been in the election manifestos of the established parties for decades and has so far led to nothing.

Capitalism needs to be further developed?
Again: the fundamental evil is not in capitalism, but in globalization, i.e. the reduction of tariffs. How can one constantly combine or interchange these two terms? How can one constantly repeat the propaganda of the capital lobby? Capitalism does not need to be developed further, it just needs to be freed from the corporate-friendly overgrowth of the recent past.

Calculation basis: Wage costs: 100 euros gross wages, less 21 euros in employee social insurance and 15 euros in wage taxes, which results in a net wage of 64 euros. At 64 euros net, 21 euros of employee contribution to social security means a 33% cost surcharge, the employer's contribution is also 33% and the 15 euros in taxes would correspond to a 23% surcharge.
Capital costs: The investment subsidies for machines are of course different, only an estimated average value could be given. There are countless funding sources at local, state, federal and EU levels.

Why is work overwhelmed with additional wage costs? And the capital (investments) pampered with subsidies?
This curiosity is also ultimately the result of tariff reductions (globalization). In an open, almost duty-free world market, you just have to attract (poach) investors. And the expensive welfare state (sickness, care, pension) has to be financed somehow. And since you can't milk the rich and corporations excessively in an open world market (otherwise they would gradually migrate), you have to shift the main tax burden onto average earners. A state that is largely independent of global barter would of course finance its social systems primarily through customs revenues and consumption taxes (VAT). But a state that has committed itself to total import and export dependence can only do this to a limited extent.

Is it populism when politicians demand a return to their own national sovereignty?
If they preach America First and want to raise tariffs to free themselves from the straitjacket of the global dumping system? Who dares to make such outrageous classifications? Denigrating anything that runs counter to the capital lobby (because it would mean a reversal of power) as populism is more than cheap. In my opinion, it has long been considered character assassination or dumbing down the people.

Did Brexit lead to a significant drop in prosperity?
After a short time, only people who are not interested in an objective discussion of the topic can make such a claim. Brexit came at a time of severe crises (Corona, the war in Ukraine, the explosion in energy prices). All industrialized countries suffered and continue to suffer from it, albeit differently. It is logical that countries that have subsidized their economy with crazy sums of money (like Germany and the USA) initially get off better (the big end comes later). Apart from that, it should be clear to real economists that breaking away from the EU will cause switching costs. So what's with the blatant malice after such a short time? Now it depends on how the British bring Brexit to life. Are they taking advantage of their newfound independence? Do they free themselves from the intra-European and global dumping system through tariffs?

Parties that do not bow to the dogma of corporate-friendly globalization (customs demonization) are branded as unelectable, right-wing radical and nationalist.

Must a relapse into protectionism be prevented?
Corporate-friendly economists never tire of repeating exactly this stupid slogan. As if protectionism was the greatest threat to humanity. As long as there are completely unequal wages and living conditions in the world, protectionism cannot be abolished. It's just about replacing subsidy protectionism with tariff protectionism. And nothing else. It is understandable that the capital lobby (and all its puppet masters and minions) would rather collect (extort) subsidies than pay tariffs.

Have the many crises since 2008 shown that Europe works?
In my opinion, you have to be very hard-headed to make such claims. Europe is dependent on a shameless flood of cheap money, small savers are slowly being expropriated, real wages have been falling for decades, the "peacemaking EU" catapults its citizens into an escalating proxy war (Ukraine) and yet everything is good, the EU is a successful model (which unfortunately is nowhere to be found copied around the world)? And of course Germany has to take a leadership role in Europe to defend the open world economy (global wage and tax dumping)? Who are these people who want to tell us such nonsense? How are they polarized? How corporate and anti-human are they? All the rules of reason and morality have already been turned upside down and it is still not enough.

How neutral do our representatives act?
When I look at the legal decrees of the last four decades, I always ask myself, how independent and neutral are our parties and representatives of the people? Could it be that the capital or corporate lobby often buys the goodwill of decision-makers, possibly through party donations, lucrative part-time supervisory board positions, cheap loans, secret donations, etc. If that is the case, many of the blatantly wrong decisions of the past seem understandable to me. But only then.

Misleading causal chains: Caught in the network of prejudices...
The powerful masterminds of globalization (especially the managers of global corporations) persistently rail against deglobalization with a misleading, long-term campaign. They fear nothing more than an increase in import tariffs. Your thought pattern/dogma:

1. The products (e.g. cars) would become more expensive in the country of manufacture because of the need for foreign supplies.

2. That would fuel inflation.

3. The more expensive goods could hardly be sold abroad.

4. Germany's gigantic trade surplus would turn into a big deficit.

5. The domestic currency (DM or Euro) would be weakened, making imports/supplies even more expensive.

6. The social prosperity and thus the stability of the country would be at risk.

But this propaganda argument ignores the most important factors.

1. The increase in the price of imported supplies would make it possible to produce more domestically again.

2. The depth of production e.g. B. for a car increases, the dependence on foreign suppliers decreases.

3. After a period of adjustment, although less is exported, much less is also imported. Whatever market share is lost abroad is gained at home.

4. Many dead industries (textiles, consumer electronics, office equipment, etc.) in which Germany was once a leader can be successfully revived with appropriate tariffs.

5. Environmentally harmful world trade would be reduced to a reasonable level if there was a global renaissance of tariffs.

6. Even the small GDR was able to produce almost everything in its own country under the terrible conditions of the planned economy. Why should the great Federal Republic of Germany not be able to do this today despite gigantic scientific and productive progress?

7. The constant panic that we could no longer be the world leader in the three or four remaining export industries would disappear. A largely sovereign, independent country does not need to be afraid of AI or digitalization. It's no big deal, sometimes just second or third best. Some questionable developments can be waited and observed more calmly.

8. In this respect, the inflation rate no longer plays a major role. Because in an intact market economy (with equal wages, taxes, etc.) it settles down to a reasonable level all by itself (without government intervention).

9. As far as prosperity is concerned: When the Federal Republic of Germany had not yet committed itself to absurd export and import dependency, when there were still effective tariffs, annual real wage increases of at least five percent were common. Since around 1980, this trend has been reversed: despite rising productivity, real net hourly wages are falling. This fact should give everyone pause.

In all debates, people tend to ignore the fact that the restructuring of the economy is taking place gradually with gradual tariff increases. Nobody expects an abrupt shift from subsidies to tariff protectionism. The state and the economy can gradually adjust to the new (or tried and tested) normality and carry out the pace of reform (tariff increases) in a controlled manner.

It occurs to me:
How unbiased are politicians and journalists who have a fat stock portfolio?
Where does corruption begin? Hardly anyone would come up with the idea of accusing politicians and journalists who own a sizeable share package of bias or corruption. But how neutral are these elites really? The corporate-friendly policy of globalization (subsidies instead of tariff protectionism), the flood of cheap money and share-based pension systems are fueling the stock market, as can be seen in the striking price development of the last 50 years can be easily seen. Highly paid top politicians and star journalists (worldwide), who can afford a lot of shares, benefit from the global ("cosmopolitan") exploitation system. Isn't there a danger that they will also think (at least unconsciously) about their own sinecures? Or is this idea absurd?

A warm request: If you liked this article (https://www.sw-magazin.com/globalization-capitaslism.html), please recommend it. Because only the general education of the population paves the way for necessary changes. Manfred J. Müller thanks you
Note: The meaning of individual theses often only becomes clear in connection with other articles by the author. It is not possible to incorporate all the background and fundamental considerations into a single essay.

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Background and analysis:
• Can the EU still be reformed?
• Research: Globalization poisons capitalism!
• History and background of the political SW-MAGAZINE
• Real democracy or just fake democracy?
• German Political Encyclopedia: independent & non-partisan
• Do doctored statistics and state propaganda form the basis of our democracy?
• Poverty research: Which countries with high birth rates are really doing well?
• The infiltration of democracy by the Cancel Culture movement …
• The nasty tricks of the anti-democrats!
• Causes and consequences of global economic crisis
• In Germany wages have been falling since 1980. Why?
• Germany: The brazen proclamation of skills shortage!
• Globalization: the ignorance of the facts
• The political and economic consequences of an brexit An analytical consideration from German view.
• "We have to explain Europe better!"
• When will the Dexit? (the withdrawal of Germany from the EU)
• The rule of law becomes a laughing stock
English: Are EU skeptics angry nationalists?
French: Sont eurosceptiques nationalistes en colère?
Italian: Sono scettici UE nazionalisti arrabbiati?
Portuguese: céticos da UE são nacionalistas irritados?
Spanish: Son escépticos de la UE nacionalistas de ira?
Swedish: Är EU-skeptiker arga nationalister?

Politicians decide whether capitalism promotes prosperity or destroys it. By ensuring fair conditions or not. The European and global wage and tax dumping (as a result of tariff phobia), the zero interest rate policy, the cheap money glut, the open immigration to the social paradise, etc. undermine the market economy and thus lead to ruin.