Economic History Case Studies: Welfare Capitalism’s “Manufacturing Fetish”

The years since the Great Recession has witnessed a growing interest among Western countries to restore their manufacturing capabilities. Although heavy and light industries are both necessary to provide any nation with finished goods, it is still naïve to treat the Manufacturing Sector as its only source of economic firepower. Even the Natural Sector, Services Sector, Information Sector, and Government Sector are important components within the overall production process. The Work-Standard is capable of illustrating how their capabilities rely on each other cooperating to achieve national policies. What I am describing here, however, is Parliamentarian demagoguery from Liberal Capitalists to turn the Manufacturing Sector itself into a sort of “Commodity Fetish.” It is yet another example of the Freedom-Security Dialectic, except its application here is designed with an Implicit Intent similar to the concept of “Wealth Inequality”: lure an unsuspecting audience into a false sense of security by creating Incentives favorable to a particular Liberal Capitalist faction.

To understand how Manufacturing Fetishism functions is to also comprehend how Wealth Inequality hoodwinks its audience. Basically, if there are other people generating more Kapital than another group, have the Parliament increase their Taxation Rate and then spend that excess Kapital on propping up its “Social Safety Net.” The excess Kapital will be ‘utilized’ with the Freedom-Security Dialectic to prevent anyone from being capable of entertaining any ideology that is not Liberal Capitalism. Depending on the Liberal Capitalist regime in question, this Manufacturing Fetishism follows the same script on a worldwide scale with the Free Trade Agreement (FTA) in mind. If there are other nations generating more Kapital than them, have the Parliament either boost the national economy’s Exports and reduce its Imports, impose Tariffs and Quotas, create Incentives for Foreign Direct Investments (FDIs) or reduce the Taxation Rate.

The trick involving Manufacturing Fetishism pertains to what the Market/Mixed Economy is doing relative to what the Parliament is doing in tandem with the Financial Markets. It entails the Market/Mixed Economy and the Financial Markets synchronizing their efforts with the national policies of their Parliament, creating a Tripartite that defines the Liberal Capitalist regime. The position occupied by the Financial Markets previously belonged to the “Organized Labor,” which disintegrated amidst a combination of FTAs and Technology mechanizing aspects of the production process. These developments occurred during Bretton Woods and the decades thereafter, the technological factor spurred on by the then-emerging “Financialization” of the Liberal Capitalist Market/Mixed Economy. With Kapital being generated directly from the Financial Markets as opposed to indirectly vis-à-vis the Market/Mixed Economy, Organized Labor became redundant, hence the growing emphasis on the Service Sector among Western countries.

In fact, these conclusions are parallel to those which I had made earlier this month regarding Corporatism and Social-Democracy. That also includes why Italian Fascism and Chinese Dengism occupy the same model of economic governance, albeit for different Intents, in addition to why such Tripartism cannot exist without fundamental agreements on Liberal Capitalist ideology among various factional interests at the Parliament:

“Meanwhile, in the Social Sciences, it is suggested that there are fundamental differences between the Corporatism of the Catholic Church and the model which was attempted by Fascist Italy. Unlike the Fascist version, the Church’s Corporatism did survive for a time after 1945 among the various ‘Christian Democratic’ parties throughout Western Europe, the parties advocating for some kind of Welfare Capitalism alongside their Social-Democratic counterparts. I say ‘Christian Democratic’ because these parties are essentially a coalescence of Roman Catholic and Protestant parties influenced by Catholic Social Teaching, allowing them to easily cooperate with Social-Democrats under Parliamentary Democracy. If they were once parties representing the political interests of Catholics and Protestants before 1945, then their post-1945 decision to merge into ‘Christian Democratic parties’ was done on grounds that were more ideological (as in a commitment to Parliamentary Democracy and Liberal Capitalism) than theological.

The question on whether any form of Catholic or Protestant politics is driven by their theology or by another ideology per se does matter in the context of Corporatism. If the motive was theological, their model of Corporatism will be closer to Fascist Corporatism or even National Syndicalism like in Franco’s Spain. Similar to my own arguments about the Mormon Church of Utah being an American model for non-Soviet Command Economy, I can also cite the Puritans of New England as an American model for Corporatism. The most interesting aspect about the Puritan version is that it bears a closer resemblance to the Fascist model, including its basic premises and goals. That was the topic of a recently released book, entitled, “The Puritan Ideology of Mobility: Corporatism, the Politics of Place, and the Founding of New England Towns before 1650.” The implications are promising since New England was historically the same place where American Council Democracy, American Nationalism and American Socialism made their debuts within the old Federalist Party.

Moreover, to further distinguish the Fascist model, some social scientists over the years adopted ‘Tripartism’ as the formal designation for the Catholic Church’s Corporatist model. Under a Parliamentary Democracy, coalition governments are supposed to act as the intermediate between the Labor Unions and the Business Community. As part of its purpose in resolving class disputes between the Labor Unions and Business Community, the Parliament is expected to create a ‘Social Safety Net’ designed to deter anyone from making any serious efforts at realizing either National Communism, Marxism-Leninism, Pan-Germanic Socialism, Fascist Corporatism, National Syndicalism, Hamiltonianism or State Capitalism. Basically, any ideology which does not conform to the established dogmas of Liberal Capitalism. The Social Safety Net consisted of the usual array of Welfare Capitalist programs like insurance, childcare and educational assistance grants, subsidized housing, retirement pensions, and so forth. These important factors should account for why I concluded earlier that Catholic Social Teaching also tends to justify a Social-Democratic Mixed Economy as well as other economic models like State Capitalism.”

But are there other factors which influenced the trend towards De-Industrialization? Who were the historical forces and intellectuals that created the fixation on Manufacturing as a sort of Commodity Fetish? A couple months ago, there was a peer-reviewed research paper entitled “From the Post-Industrial Prophecy to the De-Industrial Nightmare: Stagnation, the Manufacturing Fetish and the Limits of Capitalist Wealth.” In it, the author traced the origins of the trend back to two Keynesian economists, one of whom had passed away in 2017:

“Two set of arguments have been advanced to explain the waning dynamism of service economies, inspired by the works of [Nicholas] Kaldor[, born “Káldor Miklós”] and [William Jack] Baumol, respectively. Kaldorian arguments draw attention to the uniqueness of manufacturing as an engine of growth, while Baumolians depicts the service sector as a productivity laggard.”

As the author of the aforementioned research paper pointed out, both Kaldor and Baumol placed excessive emphasis on Technology being the sole emphasis for the generation of more Kapital. Here, the Liberal Capitalist ideological lexicon for “economic growth” obviously means a greater Quantity of Kapital with the least Quantity of Schuld. The problem with this sort of progressive, linear thinking is that more goods are being created by increasingly mechanized (and later automated) production, thereby warranting the need to eliminate Organized Labor. The “economic dynamism” of Liberal Capitalism actually wanes as a consequence of trying to generate more Kapital by simply producing more and consuming more. Not only does it allow De-Industrialization and Financialization to become both possible and inevitable, it even enables environmental degradation and resource depletion as well, not to mention Climate Change. That was the conclusion upheld by the author of that research paper, and it is also the same conclusion which I would take from the standpoint of the Work-Standard.

There are limits to how much I can tolerate the author’s arguments therein as his own Marxist conclusions do not fully appreciate the implications as much as the Work-Standard. And while I am not at all in favor of Technology eliminating more Arbeit than it creates, that does not mean I disagree with that author’s analysis. My own analysis does not need to go too far to entertain the actuality (as opposed to possibility) of Liberal Capitalism’s demise being done by Liberal Capitalism itself. It is already an actuality due to how Kapital has grown so divorced from Reality that the effects of stagnation have crept into the politics of Liberal Capitalist Parliaments. I have written about it before on multiple occasions here. Everything else comes full circle at this juncture, including the Technology and the solution to this problem.         

Therefore, it can be argued that as the Quantity of Kapital rises, the Quality of Arbeit falls since whatever is being manufactured cannot be designed to too long-lasting or too durable to upset the Profit Motive. After all, a “Planned Obsolescence” still needs to exist in order to create Incentives for people to spend more Kapital on inferior, subpar finished goods. Building something to last prevents people from purchasing more of the same. The Quantity of Schuld in existence also rises, whereas the Quality of Geld ceases to exist altogether, its own absence being facilitated by the Quantity of Kapital. And even if the Manufacturing Sector were to be ‘resurrected’ through technological means, the Liberal Capitalists will never be able to maintain an ideological hegemony within their own framework of Welfare Capitalism. The Social Safety Net is too expensive and too impractical to entrap anyone anymore.      

Categories: Economic History

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