MAD PROFITS

A new generation plays with the social peace. A polemic

By Ulrich Greiner

[This article published in: DIE ZEIT 49, 2005 is translated from the German on the World Wide Web,  http://zeus.zeit.de/text/2005/49/01_leit_1_49.]


Is decency an economic virtue? No, the economist says. Since this society is now subject to the logic of economic thinking, an astonishing calm prevails except for the cry of the affected when the head of corporation X or conglomerate Y announces with chest puffed out that a sensational profit was realized and in the same breath that thousands of workers will be discharged.

Can this be called anything but madness? Its method consists in increasing profit at any price. Whatever is economic is rational. The profit provides satisfaction of the shareholders and financial support for hard times. Reducing personnel increases productivity. This is urgently necessary, the economist says, given the growing competitive pressure. We, the non-economists, take note of this piece of wisdom either eagerly or anxiously according to our interests.

Decency is our theme. The head of a business has responsibility for those depending on him. His task goes beyond increasing efficiency and market value and pocketing a bonus in case of success or compensation in case of failure. He must also consider the fate of those under his command and the public interest. It is decent to think those who brought the realized profit should share in the profit along with investment in new jobs. It is indecent to join the proclamation of profit with the threat of more cruelties.

Even if decency is not an economic virtue, it is still the virtue on which our life together rests. Decency does not grow again by itself. It needs the concrete model of the economic elite. However this model has changed dramatically. The business patriarch smoking cigars and marked by political satire wanted to be paid, respected and perhaps even loved in the city. He was afraid of mass layoffs. He posed as philanthropic and often was philanthropic.

This entrepreneur still exists even if he hardly smokes cigars any more. He is seldom loved and respected. In the meantime, we non-economists – sobered by the outrageous behavior of certain economic leaders – even long for the return of the old patriarch.

The new type described by the American sociologist Christopher Lasch in his book “The Blind Elite” is unscrupulously fixated on economic calculation. Steeled in the training camps of business schools, he is a server of capital. Completely homeless, he feels at home in the vast world, in the air-conditioned areas of departure lounges, hotel rooms and executive suites. Wherever he is, he acts cosmopolitan. He may regard decency as desirable in private relations but not as a virtue guiding his conduct on the job. He works on time- and subject-oriented projects that must be completed come what may. He cannot feel a sense of responsibility for the community of a city, region or country. This sense cannot even arise.

“Property obligates. The use of property should serve the well-being of the general public,” Article 14 of the German constitution declares. This is not a command that the police can enforce. Its observance is a matter for everyone, first of all for the elite. The public interest is harmed when entrepreneurs only follow the particular interest of owners and charge the rationalization costs to a state that is increasingly impoverished. The social net still holds but the meshes have become larger and the threads more fragile.

While an economic calculus is unavoidable, making the economic calculus absolute has momentous consequences. Burning suburbs are not the only proof that a successful economy needs a thriving society. The signs of psychic and social protest are very clear. If this development continues, becoming entrenched in fenced-in areas would be absurd.

We no longer live in times when wishing still helped. Ascribing the triumph of particular interests over the public interest to only a few visible top managers would also be blind. They are also cogs in the machine. The motor of the machinery is the dominant mentality of self-centered advantage that represses the costs of amassing advantages, often at their own expense. Every bargain-hunter who lets the shop around the corner go to waste because the hypermarket is cheaper. and every bank customer who spares the services of an employee for cost reasons can understand with a moment’s reflection that he destroys jobs, even his own job at the end. Greed is not good or ravishing but shabby and harmful.

Consumers have power. They can punish indecent businesses by abstinence. Whoever is satisfied at the year’s end with increased profit sharing of his life insurance or expects the growth of his investment fund should remember his plus causes a minus elsewhere. Paradoxically expressed, the general economizing of thought does not go far enough. True economic thinking must consider its own costs and the social costs. Future losses must be deducted from the momentary advantage. Seen this way, the public interest – and decency – is still an economic virtue.

We are far from this ideal economy. How it could appear practically is totally unclear. Still we may not wait until conditions inevitably produce a new Marx or Bakunin. We should no longer allow the all-purpose argument “globalization” to force us into an intellectual resignation. The social market economy was the last functioning social contract. It lasted for a long time and pacified society. Now it is at an end and we must begin the debate about a new social contract before social peace breaks down. The more openly and pugnaciously it is conducted and the more people participate in it, the better life will be for all of us.