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Commentary :: Labor

Reduced Working Hours

The neoliberal growth strategy of reducing the price of labor led to a system change from Keynesianism to neoliberal capitalism. Neoliberals never sought full employment but rather the permanent division of society.

Project against Neoliberalism and Mass Unemployment

By Mohssen Massarat

[This article published in: Sozialismus 11/22/2010 is translated from the German on the Internet, Mohssen Massarat is a professor at the University of Osnabruck.]

The middle class parties are now in an identity- and trust crisis, not only in Germany. They pull no one from their chairs with their policy of growth, growth and more growth as the answer to the financial crisis, mass unemployment, falling mass income and increasing poverty. They all praised growth even in hegemonial consensus and relieved the rich in the last 40 years and in the neoliberalized social democracy for almost 15 years. Mass unemployment multiplied and was not removed. The second worldwide economic- and financial crisis is conjured. German social democracy has somewhat more voter approval by pulling itself from the swamp of neoliberalism in which it had miscalculated or gone over the top. Whether a modern future-friendly reform party will emerge is open.

What is the answer of the left including the German Die Linke party to the present challenges that the neoliberal project worldwide left in the social and ecological scrap heaps? Much is obviously in a state of flux. The Greens favor the “Green New Deal” as their strategic project and seem to have lost sight of the social question, particularly the problem of mass unemployment. Efforts for a comprehensive social-ecological program are clear within the Die Linke party. However doubts are raised whether the discussed initiatives for political action can go far beyond the whole leftist spectrum.

In an article, Ralf Kramer, member of the program commission of Die Linke, tries in delimitation from the growth-critics within the left to develop the elements of a program “for realizing chances of leftist policy and a social-ecological reorganization.” “Unions and the majority of dependent employees should be won for such a policy. According to Kramer, the social-ecological reorganization must be joined “with reduction of unemployment, securing the income of employees and creation of good new work for those whose jobs will be lost in the course of an ecological conversion […]. Such a leftist economic- and employment policy represents GDP growth. It would be frivolous and wrong to deny or conceal this.” This argumentation exists in the tradition of the union-oriented left and should be taken seriously because it integrates the ecological conversion in a social-political alternative beyond the classical fiscal-Keynesian approach. However this approach raises new question before it provides convincing answers to the present challenges of mass unemployment and the ecological crisis.

Firstly, a plausible explanation is needed how the Red-Green coalition won the 1998 election with Kramer’s future-friendly strategy but then fell into the suction of neoliberalism with trust at their backs and intensified mass unemployment and the ecological crisis and carried out the greatest social dismantling in the history of the Federal Republic of Germany with their agenda policy. What justifies the certainty that a Red-Red-Green coalition with a social-ecological problematic proposed by Kramer could free itself from the neoliberal context and bring about a qualitative political change? Secondly, why does a policy that relies on growth to overcome mass unemployment conceal where 4-5% annual growth should come from?

Kramer does not only leave these questions open. He also feeds leftist growth-critics with hopes as to a genuine nature-friendly economy for the time after “overcoming capitalist relations of property, production and distribution.” Under the new non-capitalist conditions, Kramer also regards “the general reduction of working hours” as a “central element” since development of the gross domestic product (GDP) will “not play an important role any more because increased income will no longer be the main motive and condition of greater prosperity.” This focus on a reform-perspective adjourns the historical answers to the great challenges of mass unemployment and the ecological crisis to the post-capitalist era. Nevertheless the perspective for a political change is necessary now since neoliberalism has broken down. The time is ripe to dis-empower neoliberalism politically. A social-political project capable of hegemony and able to bundle the social forces to replace neoliberalism is vital. The following analytical steps are part of such a perspective:

Firstly, reflection on the historically-changed framing conditions that led to the replacement of Keynesianism by neoliberalism, secondly, analysis of the characteristics of the hegemonial project of neoliberalism and thirdly, substantiation of a social-ecological counter-project to overcome mass unemployment and reshuffle growth.


The three decades between 1950 and 1980 were indisputably the “golden growth years” in nearly all capitalist states. Average annual growth rates of the gross domestic product in this period were over 5% and even over 10% in Japan. [1] Several factors were responsible for this development: firstly, considerable growth resources, secondly Keynesian economic policy proved very effective for mobilizing growth potentials, thirdly a considerable demand to satisfy basic needs after decades of privations as a consequence of the two world wars, fourthly development of democracy and above all strengthened union negotiating power and fifthly a modern social- and welfare policy that raised mass purchasing power.

The pivot of classical Keynesian economic policy is a governmental spending policy based on indebtedness that functions as long as refinancing debts is guaranteed by growth. However the growth reserves came to an end and a relative satiation of consumption occurred at the end of the 1970s in highly developed capitalism. [2] The model came to a standstill. Attempts to create jobs through additional state spending led to inflation. The golden growth years actually reached their zenith long ago.


In the middle of the 1970s, the phase of full employment (in Germany, France and Japan) and low rates of unemployment (in Italy, Great Britain and the US) was over. With the sole exception of the US, unemployment skyrocketed by leaps and bounds and remained at a high level between 6 and 12% for several decades. Two additional factors were important for this development outside the historical fact of shriveling growth reserves and increased satiation of consumption: (a) continuously higher productivity as a consequence of the third technological revolution and (b) increasing employment demand above all by women since the end of the 1960s. [3] In Germany, there were already 1 million unemployed at the start of the 1980s – a first high-water mark after decades of full employment.

If the social democrats ignored the fact of growth reserves coming to an end and overlooked that classical Keynesian instruments like an expansive spending policy lead to more inflation and not more jobs under these conditions, the neoliberals ideologically blamed Keynesianism and state intervention for the failure of social democratic economic policy, not the declining growth reserves. Neoliberals promised to overcome mass unemployment through growth and – entirely in the sense of neoliberal ideology – through less state and more market. Neoliberalism offered itself as an alternative to social democracy and to Keynesianism and as a replacement of both at little expense because it could seamlessly join the general consensus of the fetish growth as a cure-all for all social problems… [4]


The Keynesian growth model was based on value-creation and substantial value-enhancement. But how would the neoliberals generate growth and fulfill their promise of more jobs? From a retrospective view, the answer was firstly through reducing the price of labor and secondly through reducing the price of nature. Flexibility of labor markets, liberalization of trade and privatization of public goods aimed at this growth strategy. Since neoliberals were not tired of making growth and jobs, more prosperity, more freedom, more happiness and everything dependent on these miracle instruments, they succeeded in establishing the neoliberal spirit worldwide with parties and governments far beyond their own traditional political camp and subjugating the whole elite and the mass media…

This strategy is not based on a growth through value-creation but on redistribution in a twofold sense: through redistribution from bottom to top within a national economy with the consequence of a declining mass purchasing power and through predatory competition and growth redistribution – a zero-sum game – at the expense of other states. Some countries, like the Netherlands, Austria and above all Germany, realized export- and currency-surpluses. On the other hand, loser states like France, Italy, Spain, Portugal and Greece had to post import-surpluses, balance of payments deficits and increasing indebtedness. This policy was especially drastic for Greece and according to critical economists – was the main reason for the threatening bankruptcy of this country with consequences for other southern European states. [5] To avoid bankruptcies in southern Europe, the EU was forced to intervene with a gigantic bailout-package of over 700 billion Euros. However this bailout-package did not contain anything but new debts for the taxpayers of those EU-states that had to bleed wage-earners to finance the absurd policy of growth through redistribution and predatory competition. Strictly speaking, winners and losers at the end of this chain of redistribution are not the national economies of Germany or Greece. Rather the winners are the rich elites and the losers wage- and salary-dependent workers in the two states… [7] [8]

The neoliberal policies also aimed at growth through reducing the price of nature. The liberalization of raw material markets and intensified exploitation of the energy- and raw material-reserves served that goal notwithstanding all the ecological consequences and forced geo-politics – including wars in the last 30 years, above all in the Middle East.


With a retrospective view and starting from the result, the neoliberal growth strategy of reducing the price of labor led to a system-change from Keynesianism to neoliberal capitalism. Conversely this strategy could not have possibly been carried out without this system-change. This change presupposed the undermining of the wage-policy balance of power and the shattering of the social foundation between unions and businessmen. The negotiating power of unions in Keynesian capitalism should be ended once and for all. A power-gradient in favor of the corporate side and a capital-friendly distribution should be established as a permanent state instead of a power equilibrium and a well-balance distribution of profits. The capital side should be able to push around unions, take away their action logic – their most important asset in capitalism – dictate its goals in wage negotiations and make unions prisoners of their tactics instead of carrying out wage negotiations at eye level. In this way, no other possibility was left to the unions than to persevere in the structural defensive and sit back and watch how social achievements were dismantled one after the other. If the unions gained their fighting strength in Keynesian capitalism through full employment, mass unemployment was the Achilles’ heel of union disempowerment and of the neoliberal growth model. As mass unemployment is the worst social ground for weakening unions, those still employed are permanently frightened with losing their jobs. The readiness arises to accept all possible concessions on the wage side with social benefits and with working hours in order not to fall into unemployment and Hartz IV (drastic German welfare “reform” that combined unemployment benefits and income support and cut the duration of benefits). Under these conditions, a severe power shift could be carried ou9t that appeared – and unfortunately still appears – to wage- and salary-dependent as a quasi-natural, inevitable process without alternative – supposedly brought about by the “markets” to create more jobs.

Neoliberals justified all their “reforms” on the labor market with the pretext of reducing unemployment and achieved the opposite. Neoliberals never seriously sought full employment. Rather their policy consciously aimed at the permanent division of society in unemployed and still employed, in brave wage- and salary dependent persons ready for all possible concessions and “lazy persons unwilling to work” who are responsible themselves for their fate. How else can it be explained that a measure like extending working hours was made the political-economic pivot for more jobs at the climax of the triumphant neoliberal advance? This measure was carried out in all areas including the public sector although it led directly to even more unemployment.

Unemployment rose drastically in nearly all industrial states after the neoliberal turn at the end of the 1970s. In Germany, unemployment reached a record high since the neoliberal turn in 2004 with almost 5 million unemployed. According to official statistics, it fell to 3.24 million in 2010 because 1.4 million unemployed were removed from official data through definitional changes, not because new jobs were created. Without including this manipulation, unemployment remains at a record high of 4.8 million. [10] The million-fold change from full-time jobs to part-time or mini-jobs – affecting women above all – is not included in this number. This is also true for 4.9 million “marginally employed” who cannot survive without Hartz IV. The 3 million Hartz IV recipients are unemployed sifted out of society in neoliberal capitalism and left to themselves. They also belong to the system. Their disgraceful situation acts as a very effective bugbear that presses all job-owners to unrestricted concessions.

The result of this system-produced state of constant insecurity and anxiety is well known: the creation of a low wage sector, the forced subcontracted work system, the praxis of limited employment even in the state sector, the misuse of limited posts with starvation wages for permanent work which all served to structurally sanction wage dumping and maintain redistribution from bottom to top. At the World Economic Forum in Davos 1/28/2005, ex-German chancellor Gerhard Schroeder, the SPD politician mainly responsible for the neoliberal project Agenda 2010 even openly boasted of his success as a trailblazer in creating the low-wage sector in Europe. “We have liberalized our labor market. We had to do this. We have built one of the best low-wage sectors in Europe… We have constructed a functioning low-wage sector. With relief payments, we have put incentives to accept work in the foreground. There are considerable conflicts with strong interest-groups in our society. But we withstood these conflicts. We are certain the changed system on the labor market will be successful…”

In this system of neoliberal capitalism, unions were weakened, forced to the defensive, degraded to a hostage of neoliberalism and ultimately robbed of the possibility of an active and offensive union and social policy.


The balance of the neoliberal accumulation model is disastrous. Instead of overcoming unemployment, neoliberalism produced worldwide mass unemployment, falling wages, a gigantic redistribution from bottom to top and from South to North, the second worldwide economic and financial crisis and a general indebtedness of unimaginable extent at the expense of wage- and salary dependent, the middle class and future generations. In addition a deep division of society occurred, the weakening of unions, de-solidarity between regular employees and subcontracted workers, job owners, unemployed and social security recipients and pathogenic disease-producing anxieties about losing jobs, status and social relations. Instead of growth and more prosperity, the neoliberal policy presented humanity with a growing chasm between poor and rich, a growth of indebtedness and CO2, a nuclear waste growth and a growth of global conflicts over market shares and resources. Not accidentally, phenomena like the clash of cultures and fundamentalist movements at the extreme poles of world society coincide with the upswing of new conservatism and neoliberalism since the beginning of the 1980s.

Neoliberalism presented itself as a pseudo-alternative to classical Keynesianism and bundled social forces for its own hegemonial project by joining economic goals like growth and jobs with socio-cultural values like more individual freedom, less state and reduction of bureaucracy etc. The neoliberal spirit was enforced across the board and deep into the pores of society through a long-lasting mass unemployment and the shift of power relations through the weakening or actual disempowerment of unions. For that reason, mass unemployment can no longer be accepted as a kind of natural law constant. Only through its overcoming will it be possible to take the ground away from neoliberalism on which it thrived for 30 years. Overcoming neoliberalism now stands on the political agenda after its failures have become more obvious than ever. 30 years of neoliberal logic are more than enough. The victims of this logic should begin to reflect on the logic of their existential interests and the production of dignified living conditions for all. Unions should be strengthened in the postwar time and society given the necessary foundation for social reforms.


A full employment through growth according to the classic Keynesian model is unrealistic under the conditions of shriveling growth reserves, relative consumption satiation and higher productivity. Growth rates of 1-2% realized annually in the last two decades occurred through redistribution at the expense of other national economies, not through value-creation. Gazing at growth through increased exports or at short-term measures like short-time work are like respirators or artificial respiration of neoliberalism and only extend its life. The only possibility left is a new type of full employment through shortening working hours and simultaneous redistribution of existing jobs to all job-seekers.

Across-the-board reduced working hours must be declared the heart of a strategic counter-project to neoliberalism and made the starting point of an aggregate social project going far beyond wage negotiations. To win political and cultural hegemony in this perspective, the bundling of all social-civil forces that could ultimately profit from this is needed. Except for neoliberal ideologues, financial speculators and a thin class of property owners, these are almost all social classes and those who want to alight from gainful work. Then the exodus from gainful work and the option for self-determined activities – certainly a legitimate desire of many people - would first have a realistic chance of broad approval when unions and all reform forces regain their full creative power lost in neoliberalism.


Through reduced working hours, society altogether would not only have more time for the family, bringing up children, health care and all kinds of creative activities. Society would also be supplied with a new social foundation reversing the redistribution from bottom to top in the interest of increasing mass purchasing power. The bundling of forces assumes the subordination of all other social-political goals and distribution forces under the strategic project of reducing working hours since otherwise the spirit of discord would spread and the strategic project of reducing working hours in the sense of the continuance of neoliberalism would fall. The last egoist not ready to exchange his own possible short-term advantage for solidarity with others must be convinced he will gain even more work and not be one of the losers in the long run under the conditions of mass unemployment and low wages. A responsibility that cannot be underrated comes to union leadership.


Reduction of working hours and redistribution of work and income is also the historical answer to the limits of growth because society can first make up for chances missed after the crisis of Keynesianism in post-neoliberalism after precariousness, lack of perspectives, anxieties of loss and many other shortcomings are overcome and social-ecological reforms are carried out through a solid growth reshuffling: [11] away from export expansion to strengthening domestic potentials; away from the nuclear-fossil energy path to massive dev elopement of renewable energy; away from individual transportation and to development of the public transportation sector and modern mobility systems and building the public sector in education, health care, sports, culture, care of the elderly and all areas of social necessities.

According to the above reflections, reduced working hours and a new type of full employment is a strategic hegemonial project for a comprehensive social-ecological reorganization of society. Reduction of the paid work volumes and conventional monetary growth are possible with simultaneous growth of qualitative, monetary and immeasurable values in the social and cultural areas of society. Thus increased time prosperity is the source of a novel social wealth that can be opened up independent of overcoming capitalist property- and production relations. There is no political or moral justification for postponing this challenge.

1 Krämer, Ralf (2010): Wachstumskritik oder sozialistische Politik?, in:
Supplement der Zeitschrift Sozialismus 7-8/2010, S. 22.
2 Vgl. dazu Reuter, Norbert (2009): Stagnation im Trend, in: Wissenschaft & Umwelt Interdisziplinär 13/2009.
3 Vgl. Bontrup, Heinz-J./Niggemeyer, Lars/Melz, Jörg (2007): Arbeit fair teilen. Massenarbeitslosigkeit überwinden!, Hamburg, S. 45ff.
4 Lambsdorff, Otto Graf (1982): Sparkonzept, in: Dokumentation Nr. 9/82 des Bundesministeriums für Wirtschaft.
5 Vgl. dazu u.a. Krugman, Paul, in: Frankfurter Rundschau vom 19. Februar 2010; Flassbeck, Heiner, in: Freitag vom 18 Februar 2010.
6 Vgl. Massarrat, Mohssen (2009): Reiche aller Länder, bereichert Euch, in: Krull, Stephan/Massarrat, Mohssen/Steinrücke, Margareta, Schritte aus der Krise, Hamburg.
7 Ausführlicher siehe Schäfer, Claus (2009): WSI-Verteilungsbericht, in WSI Mitteilungen 12/2009.
8 Riexinger, Bernd (2009): Perspektiven des Protests, in: Sozialismus, Heft 7-8/2009
9 Ausführlicher dazu vgl. Massarrat, Mohssen (2006): Kapitalismus – Machtungleichheit – Nachhaltigkeit, Hamburg, vor allem Kapitel 3.
10 Ausführlicher dazu Lunapark, Heft 10, Sommer 2010, S. 2f.
11 Vgl. Massarrat, Mohssen (2009): Weniger wachsen – weniger arbeiten. Eine realistische Alternative, in: Wissenschaft & Umwelt Interdisziplinär 13/2009.
ready for all concessions and lazy persons unwilling to work.

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