The Welfare State - Nothing But the Management of Capitalistic Poverty Ruthless Criticism

The Welfare State:
Nothing but the management of capitalistic poverty

[Translation of Freerk Huisken's contribution to a debate, 2003]


The existence of the welfare state strikingly shows two basic facts about capitalism. On the one hand, it can be seen that capitalist enterprises over and over again bring their workers into various life emergencies, ceaselessly, massively, thus necessarily. They throw them on the street, attack their health, and finally ruin their ability to work so irrevocably that no business wants to employ them any more. On the other hand, the history of this supplementary institution shows that wage laborers cannot master these emergencies by means of their own earnings. If the owner of capital decides that their work is useless, then they are dependent on the assistance of the welfare state. The individual worker can finance his living costs with his wages only in those periods of his life in which he earns them. He earns hardly anything; he has nothing. Therefore, the welfare state shows the poverty of wages: in this country, the person who depends on wage labor and works himself to death in the factory or the office finds out that the wage he gets for it does not provide enough to live on.


This at all times and everywhere experienced judgment about wage labor does not lead to a social fight against the obvious causes of the regular and massive loss of wages of those dependent on an income. With the organization of the social insurances, the bourgeois state makes clear that the sole causer of these emergencies, the capitalist enterprise, not only should not be “held responsible,” but spared. When a government emergency administration is drawn up on a large scale, it is only a matter of “cushioning” and “reducing” the consequences and effects of the capitalistic use of workers. The ruinous use itself is set in law by the welfare state as the normal case of everyday capitalistic working life.


With the financing of this emergency administration, the welfare state ensures capitalist wage calculations against all demands from the side of the workforce. The fact that wages are only paid if it is profitable for the enterprise – nothing in this should be changed: the supplementary funds come neither directly from the capitalists, nor are they pried from them as taxes. Other national budget appropriations are also much too costly for their managers to “only” overspend them on the “unproductive” consumption of the unemployed masses. Instead, they are obtained from those who are damaged. By the forced seizure of a considerable part of their earnings, the workers are made poorer. This is already paradoxical: the wage is not sufficient for the individual worker to keep himself above water during periodic emergencies, but it should be sufficient if combined together with all other wages, as a total wage of the wage earners! Whether or not this works is not the question. The poverty managers of the welfare state have to ensure that it does. They diligently distribute only the deprivation that characterizes wage labor among everyone subject to compulsory insurance. Therefore, with its insurance system, the capitalist state forces the workers to take over, collectively and mutually, the liability for those emergencies that capital regularly creates for them. Then this is praised as the “principle of solidarity” or an “intergenerational contract.” The demand that the welfare state be made superfluous is thereby immediately labeled as cynical.


The welfare state impressively proves with this financing that the help that is granted in cases of unemployment, illness, disability, etc., makes the famous “lazy life in the social hammock” far from possible. The compensation disbursed in emergencies is calculated so that it forces the recipient to find paid work again as soon as possible – in the same employer-employee relationship that brought him into money problems in the first place! Nobody can support a family with 55-65% of the sum of money that is already hardly enough for the purchase of necessities anyway. The supplementary social funds, particularly unemployment benefits, are used to keep the wage laborers useful for future work. Nothing more is aimed at. No wonder that this extortion of all unemployed persons, with its “stipulations” in regard to work and wages, increasingly degrades their material conditions.


With its requirement for the fastest possible reintegration into the capitalistic work process, the welfare state clears up any illusions that it might be a charity for destitute wage earners. Rather, it understands social assistance as a business service for the class of its favorite citizens, the owners of capital. The requirements that the “beneficiaries” must undergo ensures that businesses are never lacking willing and cheap human resources in good economic times. The clients dependent on the welfare state form not only a “reserve army” (Marx) who are forced to accept the next-best work. Even in stand-by, they fulfill yet another service for the business class: as unemployed workers, they permanently press down the wages of those employees who the capitalists use very well indeed.


All political parties now espouse for the welfare state what can easily be recognized as a consequence of the principle of this official administration of distress; new political criteria for handling the “social question” are revealed. If capital produces ever larger masses of people in all kinds of emergencies, visible above all in the rising unemployment statistics, then this has two corresponding consequences. On the one hand, the financial demands on the social security system increase; however, on the other hand, the payment of contributions becomes smaller for the same reason. In times of increased financial demands, the welfare state finds only a shrinking total wage to plunder. Then the well-known and happy consequences are automatically understood: more cash and/or less pay! This cannot be a surprise when the welfare state pot is only established as the dependent variable of the total wage paid by capital. In the meantime, the state has taken a new position on this. It neither simply wants to continue the usual procedure of poverty rearrangement under new conditions; and it would not think of substantially raising the social funds with public revenues. Because the number of unemployed persons has grown so much, they are no longer needed any more as reserve workers at all. Besides, wage lowering no longer needs to be done through the competition of the workers, but can be done with the support of the trade unions – thus with the help of those organizations in which workers call off their competition with each other. Therefore, the conventional welfare state is considered no longer eligible for financing: if the old supplementary systems can no longer be financed by deductions from the total wage, then the entire working class becomes too expensive for the welfare state. Thus, the “old, fought-for entitlements” are mercilessly reduced. Certainly, this creates a lot of human scrap that has to be paid for and looked after by the regulatory agencies. At the same time, the politicians and entrepreneurs submit a new interpretation of mass unemployment. If increases in the number of unemployed result, then – they conclude, razor-sharp – labor is just too expensive for capital and must be made cheaper. Thus “welfare cuts” can be sold as one more offensive in the creation of new jobs. The people’s impoverishment becomes an investment in future jobs, because – so it goes – the profitability of the enterprises must be improved. Besides, it is not because of high wages that suffering employers can no longer follow their favorite pastime, i.e. giving workers work. Mass unemployment is the product of excessive increases in productivity, which the capitalists use in order to extract ever more profit out of ever fewer workers with ever lower labor costs. They should be able to do this even further. The old welfare state lie – that wages get along with profits – is withdrawn from circulation and is replaced with the practical clarification that profits and wages are not compatible, even in principle.


By now, the welfare state's disposal over substantial parts of the wage – still completely retained from taxes – is only one more blessing for the new wage reduction program. Those parts of the wage that are called “supplementary benefits” are lowered. The welfare state, originally created in order to keep the working class usable against their ruinous use as the source of capitalist wealth, is now active in the people’s impoverishment. It not only functionalizes proletarian distress: it produces it at the same time. Why this appeals to politicians today is no big secret: they have decided to make their goal national success in the international competition for the leading capital location. And if an economic crisis interferes, then they must only more industriously remove out of the way all obstacles to the growth of capital, thus “too high” labor costs, wage agreements, protection against dismissal, part-time employment limitations, etc. In their national program, they want to be distracted by nothing and nobody.

Criticism of welfare cuts is necessary. However, a fight against welfare cuts that wants to save the old welfare state is an error. Anyone who wants to defend the old against the “modern” welfare state sticks to the old support of poverty against the new impoverishment. He has accepted that the lasting basis of the welfare state is the permanent and massive production of cases of damage by capital.