Corp. Extortion Over Minimum Wage In Germany: BMW, Daimler, VW Threaten to Offshore Production

Wolf Richter's picture

Wolf Richter

Germany has neither a minimum wage nor a government. Someday it might have both.

If not, there will be new elections, and Chancellor Angela Merkel might get pummeled because she’d get blamed for them. The CDU/CSU won a phenomenal victory in September, but not an absolute majority. To govern, it must form a coalition. Erstwhile coalition partner, the FDP, got kicked out of parliament. Now Merkel’s clan is negotiating with the left-leaning SPD, runner-up in the elections, to form a Grand Coalition.

They’re horse trading over who gets which ministry, and they’re tearing each other’s hair out over sharing election spoils, and they’re butting heads over legislative projects. Among the SPD’s campaign promises was a general minimum wage. Not a non-subsistence minimum wage, of the kind favored by the US government, but €8.50 ($11.50) per hour.

Fear-mongering over it started to heat up at the end of October when Daimler CEO Dieter Zetsche told the Handelsblatt that imposition of a minimum wage would cost jobs in the long run. It would not hit the automotive industry per se due to its higher wage levels, he said, but the Mittelstand – privately held enterprises that have become world leaders in their niche, at least until the Chinese came along. They’re component suppliers, so higher wages would feed into input costs for automakers. The labor market must remain flexible, Zetsche said. But at the time, he still couldn’t envision moving production from Germany to China.

What a difference three weeks make.

Germany has been accused of becoming a low-wage country. For a reason. Workers – from doctors to cleaning staff – have watched their real wages decline for years. Individual taxes have been jacked up, corporate taxes have been cut. Retail sales are now lower than they were in 1994. It’s not magic. It’s a national policy handed down from government to government like a religious document: exports at any price.

This dependence on exports, and the parallel overexposure to wages in China and elsewhere, “has deprived Germany’s workers of what they have earned, and should be able to save and spend,” US economist Adam Posen writes. “Most importantly, this means they move down the value chain in relative terms, not up.”

But low wages are corporate manna. Hence the fight over minimum wage, with a good dose of corporate extortion.

They did it together during a joint interview published by the Sunday edition of the Bild, the most read paper and tabloid in Germany: the CEOs of Daimler, BMW, VW, und Opel. But it was Daimler’s Zetsche who pulled the ripcord: “If the conditions in Germany continue to get worse, we have to think about the transfer of production to other locations.”

Offshoring to China? For years, they’ve been building plants in China, and it has become their most promising market. China is written between the lines every time a CEO of a German automaker says anything at all.

The auto industry needed to strengthen its competitiveness, not weaken it, Zetsche said. VW CEO Martin Winterkorn agreed; collective bargaining partners should be the ones negotiating wages, not the government. “The principle of collective bargaining autonomy in Germany has been proven,” he said – in light of the real-wage declines that these CEOs are so proud of. And they fretted about the controversy over temporary and contract workers that has been spiraling out of control.

More than one million people work as temporary or contract workers for the metal and electrical industry in Germany, which includes the automakers, the Spiegel reported. Nearly one third of the workers in the industry! In the auto industry, 100,000 temporary workers and 250,000 contract workers (employed by Randstad, Loewe, or other staffing agencies) work alongside 763,000 regular employees.

Manfred Schoch, chairman of BMW’s supervisory board (workers’ council) explained that he was not opposed to contract work per se to keep some flexibility, but “a problem arises when tasks that used to be performed by BMW employees are assigned to other companies whose employees on our premises get half the wages.”

Detlef Wetzel, head of the Industrial Union of Metalworkers (IG-Metall) didn’t mind contract workers in general, he said. But he was against them “when they’re used to massively suppress wages.”

The evil combination of a decent minimum wage and some limitations on temporary and contract work are now on the negotiating table in Berlin. If they make it into law, Zetsche said, “Germany would squander its lead in Europe in terms of competitiveness.” And VW’s Winterkorn opined that it was “reckless to eliminate or limit these instruments of flexibility.”

These “instruments of flexibility” have worked well: record corporate profits, fabulous bonuses for the top echelon, and record trade surpluses. On the other side of the ledger: strung-out workers who cannot afford to spend or save money they’re not making. And the consequences have been documented by a huge, multi-year ECB study.... Total Fiasco: Germans are the Poorest in The Eurozone

But cheap labor wasn’t their only concern. They also complained about the cost of energy, which BMW CEO Norbert Reithofer said was twice as high as in the US. And now, companies may soon lose an exemption from expensive renewable energy surcharges. Business leaders worry this will “destroy Germany’s industrial core.” Read.... German Industry Dreads Getting Slammed By The Costs Of Green Energy

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Eagle Keeper's picture

My VW Jetta was built in Mexico....

honestann's picture

The solution?  Simple.  Eliminate corporations.  Eliminate the inherently evil notion of "limited liability".  Let the individuals who own and operate businesses be fully responsible for what they and their employees do - both financial and criminal.

There are no "them" and "us".  That's just BS.  There is just each individual on this planet, and everyone else.  They're all humans, they all deserve the same treatment, namely, get what they deserve.  Which includes, earn was much as they net produce.

As long as "outsiders" influence the agreements between individuals, injustice, bad feelings, and ultimately destruction is unavoidable.

Anyone who is worth more than they are getting paid... QUIT.  Open your own business and prove it.  Yes, of course, I'm the first one who would acknowledge the game is rigged in favor of huge corporations and government workers, but I don't accept that either.  Government workers destroy (produce negative value), and nobody should pretend corporations exist, much less give them protection from the consequences of their actions.

The solution is never more arbitrary rules and fights over power.  The solution is always to eliminate any power any individual has over any other individual.

malek's picture

You start with oversimplification but then deduct from that.

Try to stick with the central point: "limited liability"

I personally have no problem with limitation if it's still going to really hurt the liable person, but stops short of completely ruining him.
Is the limitation too low nowadays? Maybe, not sure on that one

honestann's picture

You must be kidding!  If individuals did ANY of the things that large financial corporations have been doing the past several years (if not centuries), they would have been locked behind bars instantly, and for life.  Unless, of course, they were a major fundraiser for Obama or Bush or other top-level predator.

You really, really, really must be blind if you don't see that "regular individuals" end up in jail for the most infinitesimal of actions (many harm nobody but themselves, and many harm nobody at all)... while predators-DBA-corporations regularly harm enormous numbers of individuals, and rarely even pay a fine, much less send the perpetrators to jail.

Also, while the notion of "limited liability" is very important, the main point is the fact that "corporations" and "government" do not exist at all.  Literally.  Even in fundamental law, which was created before all human were utterly and completely braindamaged, all organizations were correctly identified as "fictitious entities".  Somehow, people 100~300 years ago understood and admitted (even officially) what virtually nobody today can grasp --- the difference between real and fiction, the difference between "existent" and "non-existent".

About 99% of problems that people discuss in ZH and elsewhere would simply vanish if everyone involved only spoke in terms of the individuals involved.  I'm serious, try it for awhile.  The only reason most problem exist is because virtually every human being today thinks and argues in terms of fictions that don't exist, rendering all their arguments completely bogus (even those who advocate correct outcomes).

Though only a few extreme outliers recognize, this is the reason mankind is permanently screwed.  I mean, what would anyone expect when an entire species of crazed chimps is utterly insane in the most fundamental possible way (unable to distinguish real from fiction)?  You get what we have today, an entire species flushing itself down the toilet of history.

malek's picture

Wow, not sure if this discussion leads to anything:

Because a corporation is not a "real physical" entity is meaningless in law. If the law defines that "fictitious entity" to have rights, it is so for all immediate matters and purposes. (You need to start a separate discussion if you don't like the law.)
There are lots of other "fictitious entities" around as well, such as the Rule of Law and any kind of government on any level, and depending on your belief even The One.

You seem to be mixing up "limited liability" which is purely meant in a financial way, with "financial corporations" on which the rule of law is not enforced anymore nowadays.

By mixing everything together and comparing apples with oranges, I have to say you are in a way helping the elite who try to cover everything up under unnecessary complexity.
The only way do defeat them is going back to simple truths, evenly applied.

honestann's picture

Obviously you don't read most of my posts, where I demonstrate beyond the shadow of any doubt, that:

government doesn't exist.
corporations don't exist.
organizations don't exist.
nations don't exist.
authority doesn't exist.
officials don't exist.
law doesn't exist.
statutes don't exist.
regulations don't exist.
... and so forth.

Once people pretend a fiction exists, well, then literally, "anything goes" in the minds of those fools who accept the fiction as real.  The rest is nothing more than a farce about completely insane chimps bouncing off the walls because they're brains are tied up in mobius pretzels.

No, I'm doing exactly the opposite you imagine.  I am pointing out what actually exists, and what does not, because the MOMENT you allow the predators to get you to accept any of their fiat, fake, fantasy fictions --- they've got you.  Game over.  They win.  Every time.  Hands down.  Period.

The only intellectual defense is --- to clearly understand what is real, and what is fiction, fraud, lie.  And if you don't have the intellectual defense, you won't put up physical defense either.

Here is the first truth that I suspect you need to face.  This is one of the examples that I've gone through a million times (it feels like) here on ZH over the years.

A bunch of folks meet and sit at a table.  They craft a document.  They all sign the document, all 30 or so of them.

Now I have to ask you.  Is there ANY real, legitimate basis to imagine (much less enforce) that their document obligates 1-million people?  300-million people?  7-billion people?  How about 240 years later?


Well, how about if those folks were the dimwits we call the "founding fathers", and the document was "the constitution"?

Answer:  Makes no difference who they were, and what they called themselves, and what was on that document.  ANY group of humans can write and sign a document.  ANY group of humans can draw lines on a map of the continents, and scribble names in the bounded areas.  Even people in insane asylums and first grade classrooms.

However, nobody is obligated.  Also, NOTHING real popped into existence when the signed the document.  If you think something did pop into existence, tell me what it was, where it was, how much it weighed, etc.  And please don't be stupid and point to some "government building".  In case you hadn't noticed, that's a freaking "building", not "a government".

When any group of people sit around, write words, sign documents, and pretend to create the "Intergalactic Empire of Dweebs" (for example), nothing happens... except ink smeared on paper, and the dimwits in the room form a new mental-unit (concept of sorts) in their brains, onto which they imprint and associate some name like "Intergalactic Empire of Dweebs".  But that's all that happens --- ink smears and mental-units.  But mental units without external referents are exactly what the term "fiction" means.  And just reconfiguring your brain doesn't create anything in the external world, otherwise whoever created the fiction "SantaClaus" would also have created a fat man and a toy factory at the north pole --- which he didn't... which is why "SantaClaus" (and "the USA") are pure, utter fictions.

This really is simple, but human brains are so corrupted by parents, teachers, media and the other chimps around them that... they become utterly and totally incapable of recognizing what is fiction and what is not.

I mean, you think they'd see what is obvious.  That every human comes to exist the same way --- they are born.  So there is inherently no basis for any human to claim the other is obligated to obey him, or pay him.  Obviously any claim that either could make, so could the other, immediately revealing the absurdity of the entire notion.

Yet... humans actually believe utterly and completely insane things... like 30 dudes 240 years ago in Philadelphia signed on a piece of paper and somehow (please explain how), obligate YOU today.

Yeah, right.  In your freaking dreams!

But not mine. 

malek's picture

But why stop there.

History doesn't exist (you didn't experience it yourself so how do you know any of it really happened like it's told)
God doesn't exist.

Ideas such as the Categorical imperative or the Constitution or the Bible... well they do exist, but we'll never know how other people feel about them or if they choose them as their principles and stick to them, because we will never be able to first-hand ask all or just the majority of them.

But then how do you come to terms on how to coexist with other individuals?
By hope? Or ignorance?
Or by selecting a set of (not self-contradicting) and widely known ideas and then encourage (not persuade) others to select the same?

The only obligation one has, is to stick to one's own chosen principles. And even that one can be cancelled if one doesn't mind selling out ethically and intellectually.
And the latter looks to be what more and more citizens seem to be doing.

And now trying to circle back:
How can you demand "full financial and criminal liability" if nobody has any obligations? No rules of law exist that were explicitely agreed upon by all affected individuals?
Devils advocate mode: Isn't the slow breakdown of society nowadays even a good thing as more and more folks realize they aren't obliged to anything??


honestann's picture

You are asking and exploring the right kind of questions.  And doing so from a young age until death is the appropriate intellectual state for any sentient being, humans included.

I infer that most likely we are physical beings living in a physical universe.  Given that inference and some other clues (like all the evidence lying around that causality and the consequential progression of states from other states is a fundamental feature of reality).  From that I infer that existence/universe/reality did not just pop into existence when I first came to exist (either my physical being or my sentient consciousness).  So, my inference is, there at least was a history of some sort (existence before my existence), and based upon my observations of earth and the universe, I infer that history extends back at least billions of years.

Of course, you probably mean "what exactly was that history", and that indeed is an extremely important question to ask, investigate, grapple with, and attempt to estimate.  Being a hard-core futurist, I'm guilty of not paying as much attention to past history as I should, even though some of the few investigations I've attempted were getting a bit fascinating.

So, how do I deal with the lame state of my "knowledge" (guesswork about) history?  Well, I can tell you a funny true story about that, then try to answer more seriously.  When I was in junior high school, 7th or 8th grade (not sure), I had the usual history class.  Being that I was an early and very hardcore version of the prototypically "nerd girl", I paid no attention whatsoever in my classes, and instead worked on my optics problems, or telescope design, or whatever observing project I was working on at the observatory where I spent a lot of time at night (clear or not).

One of those times I completely lost track of where the teacher was, and I was oblivious when he walked up the isle from behind me and say me scribbling math or something on my desk (as in, "not taking notes on whatever he was talking about").  I was not one to get in trouble (stayed quiet), but that was just too much for him, so he slapped the back of my head to bring me back to the reality of the classroom, then asked, "have you ever learned anything from history?".

The class laughed of course.  I didn't know what to say, didn't even think about it or plan to answer (usually I would keep my mouth shut in such a situation)... but without a conscious thought, I immediately answered:

The only thing I've learned from history, is that nobody ever learns from history.

It is every strange.  At that point, I didn't even consciously realize that I had noted that fact of history - that leaders and countries take the same actions again and again and again throughout history.  The implication was, of course, that the usual soundbite about why we should learn history (to avoid repeating it) is obviously futile.

Of course the class laughed nervously, sure I'd get my butt kicked (detention).  The teacher started to open his mouth to reply, but didn't say anything.  He just stood there... either thinking about what I said, or thinking about what he should do to me.  After several seconds he just continued walking and babbling his history lesson.

The funny thing is, I do learn from history... history simply being part of reality, albeit one with serious, serious problems (little first hand observation or knowledge, which is crucial to me).  But I know humans are the biggest liars in the universe, so I'm also aware that history is at least mostly written by blatant liars and other misguided fools who quote blatant liars and official propaganda.

Yes, you are correct to say "ideas exist".  That's the core reason that "fictions can exist", a fiction simply being "an idea without referent".  I prefer to refer-to the notions "ideas" and "concepts" as "mental-units", because that's more helpful to someone implementing human-level consciousness like I am.  Actually, internally, we call each mental unit a "cog" (short for "cognitive unit" I assume).

What I keep trying to point out in ZH, which is my only semi-human contact other than the folks I collaborate with on our project, is how utterly and totally humans are controlled by their mental-units, and how insane humans are (and act) if they don't bother to notice the "reality status" of each mental-unit they mentally manipulate and think with.  I point out that it is literally a fact in the world today that almost all human beings take most of the [most important] actions they take based upon the mistaken assumption that the status of their most influential mental-units == "real" and not "fiction".  And thus, we have a planet on which almost every single individual of the dominant species is stark raving insane in the most fundamental way possible (unable to distinguish real from fiction).

You are correct to say that we are vastly better off if we understand how other humans assess their own mental-units.  Obviously we can better estimate how they will behave, which is extremely important if we have any significant relationships with them (friends, family, employers, co-workers, friends, partners, suppliers, etc).

Unfortunately, to address that very question you posed, the usual answer is not so much about how or what they think, but whether they operate with the modus-operandi of a "predator" or "parasite"... or the ethics of "producer".  Sadly, the mental content isn't most important, the "timeframe" they operate upon seems to be usually the most important question.  Almost everyone in the "predator", "parasite" or "sheeple" category operates on a short-term basis --- they will act in whatever way they imagine will lead to a short-term benefit for them, regardless of what are the long-term consequences to them, or the entire species.  In contrast, by the very nature of almost all productive processes, "producers" pay full attention to medium-term and long-term consequences, as well as short-term consequences (in other words, all consequences).

So, how do we co-exist with other individuals.  I can only state my personal strategies, based partly on my observation and understanding, and partly on my personal distaste and low tolerance for "nonsense" and "disingenuous jerks".  My first strategy is to avoid human beings.  That works pretty well as a first order, general rule.  That's why I live alone in the extreme boonies, 125km from the nearest tiny settlement (about 100 folks), with only a dozen or two scattered individuals close than that (none within 80km).  All I can say is, being far away from humans works great!

Given the abundant evidence, and especially the trajectory of intellect and behavior of modern humans, I now believe it is utterly futile to even imagine in our wildest dreams that those of us who are "producers" can interact with most humans successfully.  And we're certainly wasting our time if we imagine we're going to significantly influence the thinking or behavior of humans on any wide scale.  The predators have nearly absolute, complete, utter control of the minds of most folks.  Even folks who consider themselves "liberty advocates" and such are motivated by so many bogus mental-units that... they're fundamentally unreliable and dangerous.

For example, consider this example.  How many "liberty advocates" support following "the constitution"?  Answer: most of them in the USSA do.  What does that mean?  It means, whether they ever think about it explicitly or not, is that they accept the following notion:  That 30 individuals can sit around a table, write and sign a document, and somehow magically and legitimately obligate millions if not billions of people!  And not only obligate those who are alive today, but everyone who ever is born!

I mean, seriously!  Are they crazy?  Answer:  yes.  More importantly, they've been suckered into accepting, and actually supporting, a fundamentally anti-liberty, anti-individual, anti-ethical, and extremely aggressive premise --- that some individual or individuals can legitimately control and obligate endless others, simply by assertion!  What these misguided potential allies did is, accept the notion of rule.  Which is the core notion of endless, unlimited slavery and injustice.  And they do this even after observing the current example of 1776 to 2013... like that really worked out great (with wars, slavery, killing and enslaving the indigenous folks, and endless other examples of mass-scale aggression).

You'd think they'd figure out that "mass-scale control" is inherently dangerous, even if they don't notice that "mass-scale control" is inherently unethical.  But no.  They haven't even realized, apparently, that the only legitimate (and real) level to formulate ideas about human interactions is the level at which all human interactions take place --- at the level of each individual.  If they did, they'd realize they only need to convey and convince others of one simple idea (which can be stated in at least 3 ways, but comes down to each individual saying to each other individual "don't harm or steal me or my stuff, and I won't harm or steal you or your stuff".  That's it, other than stating what we'll do if they don't treat us the way we intend to treat them.

Since even our potential allies are firmly in the grip of predator ideas (collective rather than individual based ideas), the best approach for me is: avoid humans... for now in the extreme boonies, and ASAP, elsewhere in this solar system and eventually (decades or centuries) perhaps beyond.

In the mean time, it is indeed difficult to completely avoid all humans.  Though I have now implemented a rather self-sufficient existence in the extreme boonies, and probably could live the rest of my life without additional inputs from outside, I would not want to do that.  I still want to access the latest and greatest technologies, and I can't, for example, make my own ICs (integrated circuits), which is a huge limitation.  Ultimately we will need to be able to create our own ICs, but that will have to wait until we are ready to leave this planet, and I no longer have sufficient resources (gold) to purchase even a tiny scale IC fabrication system.  And that's something we really need to have when we leave earth to live forever in space without earth resources.

So, as a practical matter, those of us who are producers can be very careful to observe the nature of other individuals before we voluntarily interact with them.  Usually purchasing conventional goods is reasonably easy, though even that is becoming increasingly problematic in some cases.

Yes, humans need to (and generally actually do, whether explicitly or not) choose a set of principles OR a modus-operandi, and stick to them [until it isn't convenient].  As I've explained many times in these ZH replies, "producers" have principles, and "predators" have a modus-operandi (get away with whatever they can).  This is a fact that producers need to thoroughly understand, internalize, and act upon.  The fact is, predators of all species need to be treated as predators (immediate and usually lethal self-defense).  To attempt to give predators they same treatment as other producers who have a subtle disagreement they wish to resolve ethically and peacefully... is insane!  The predators almost always win when they are treated like other producers, and at the very least, consume enormously more time, effort and resources from producers than a single freaking bullet (through the brain).  Of course, it absolutely is the obligation of every producer to make sure he is dealing with a predator (or at least an instance of predator behavior) before they take actions reserved for predators.  So I'm not advocating reckless behavior here, only sane behavior.

To answer your final question, I must start by pointing back at your own observation that we must choose our principles, then live by them.  I agree, and that is the basis of my answer to your final question.

You are correct to say that "nobody has any obligations", if that means that "nobody has any inherent obligations".  I mean, if we go all the way back, both in history and in logic, humans were predators.  We who are producers have no authority to tell humans, much less other species that "you must be producers" or "you must abandon your predator ways".  You are correct to point that out, and that is a very astute and important observation.

In fact, since ALL that actually exists is individuals (no government, no corporation, no collectives), each of us individuals must deal individually with each individual.  That doesn't mean we don't need a strategy and/or principles to guide us... we do.  And we have already seen the two fundamental choices that individual humans have had since humans learned they could be "producers" as well as "predators".

That choice is, indeed, the fundamental choice for all individuals.

If we choose to be predators, we don't owe any other individual anything.  Nothing.

If we choose to be producers, we implicitly (and usually explicitly) make a voluntary agreement with other producers.

Essentially, the producer agreement just conveys the fundamental nature of the producer form of existence, namely, to create/produce what he needs to survive (as opposed to just grab whatever he thinks he can get away with, per the modus-operandi of every predator).  Implicit in this idea (produce to survive and enjoy life) is that we will also let other producers enjoy/bare/suffer the consequences of their own actions too (namely, the goods they grow/raise/produce).

The standard and fundamental form of this agreement is called "ethics", which is entirely a producer invention and manifesto.  It is not a fundamental fact of nature, but is a statement of a fundamental fact of nature, namely, "causality applied to human action".  Briefly, the idea is this.  He who takes an action, and is thereby causes consequences (effects) should be the one, and only one who enjoys/bares/suffers ALL the consequences of his actions.  Period.

And that is the fundamental nature of human production, namely, we take certain actions in order to cause to exist what otherwise (through existing natural processes of the environment) would not have come to exist.

As you can see, this notion of "ethics" is absolutely nothing more than identification of the fundamental nature of reality, namely "causality" AKA "cause and effect"... applied to human actions (as opposed to inanimate actions and actions of non-sentient species who don't comprehend choice).

Of course, pointing this out makes religious folks explode in anger.  The very notion that "ethics" AMA "morality" requires no "authority", much less "god", exposes one of their huge lies --- that "ethics" or "morality" can't possibly exist, or have any basis, unless issued by "an authority" (god, king, religion, government).  This lie has been sufficient to convince billions of weak-minded fools to succumb to the insane notion that "authority" is the fundamental fact of reality (and ethics), rather than the fundamental nature of reality itself.

Anyway, to finish answering your question, the bottom line is this.

A predator just gets away with whatever he/she can, against producers, parasites, predators, any individual of any species, and any [inanimate] thing.

A producer points at his identification of the fundamental nature of reality that applies to his way of life (causality as applied to human action), then behaves accordingly.  He treats other producers as allies, friends, partners, neighbors, collaborators, does not harm, destroy or enslave them or their property, and trades with them voluntarily when both sides gain by the exchange.

And finally, if a producer has any brains or insight at all (most don't) they treat predators in the same way predators treat others --- with a bullet through the brain when the need arises (which is called self-defense).

The paragraph above is one way to explain why and how mankind flushed himself down the toilet.  Because he is not very thoughtful, and of course because the predators have been extremely effective at blocking coherent identifications like what you read here from becoming widely heard, producers attempt to treat predators like other producers!  This doesn't work --- at all.  Which is why mankind is finished, and approaching very painful destruction.

I mean, think about it.  If every individual killed every individual who attempted to harm, steal, destroy or enslave him or his property... would enormous fictions like "government" ever been possible?  Answer; no way Jose!  If every time anyone tried to take your goods (including money), you killed them, would there be any "tax collectors" or "enforcers" out there today?  No!  There would be the regular sorts of predators, of course, though probably very few, because they'd soon realize the life of "production" is vastly more effective and rewarding than their very dangerous life of "aggression".

I don't know whether the breakdown of "society" is a good thing.  If we can believe history, the outcome is almost always to adopt some even more egregious form of predatory authority.

Maybe I could say this way.  If every individual on earth read this post over and over again until they thoroughly understood the facts of reality that I'm pointing at, and the choice they have... then we can go ahead and have one final war of "predator versus producer" and then either re-join the "lower" species as permanent predators (assuming any human survives), or become a species in which producers dominate (individually, not collectively) and the occasional jerks who choose to be predators are quickly eliminated.

But it will never work if humans refuse to pay attention to which of their mental-units refer to real things, and which are made-up fictions and illusions.  Without this being a standard feature of human beings, the species is hopeless.  Which reminds me of another story of my youth that illustrates why I am very much not optimistic.

Since I was very young (namely, 4 years old), I used to argue that babies and young children should never, ever be exposed to fiction.  No fictional stories, no "cutesy poo" nonsense.  I'm convinced this is one reason that the core levels of the brain form into a fundamentally irrational fiat, fake, fiction, fantasy incoherence with a strong habituated positive for "fiction" and "fantasy".  I mean, look at how parents make babies and little kids associate "happy" with "fiction" in the form of stories and such.  I've even noticed they love to tickle little babies when they're reading or telling silly fictions to them, to essentially force their response to fiction to be laughing.

This creates a massive tendency in most humans to favor fiction, or at the very least, tolerate and enjoy fiction.

Now, I must say, I personally love fiction!  Furthermore, fiction is a huge part of my life.  For example, I invent new products... which are entirely fictional until I design every little detail required to make it work, then actually build at least the working prototype.  At which time my "fiction" is now "real".  You see, at every step of that process I am utterly clear what is the "reality status" of my "fiction" (then "reality").  There is never any confusion.  Ditto for some of my old sidelines like writing screenplays.  I understand completely, from beginning to end (including while watching movies), that fiction is fiction is fiction is fiction.

Nonetheless, my point stands.  Any individual who is not constantly aware of the "reality versus fiction" status of every mental unit they hold and manipulate and think with... is screwed.  I mean, this constant awareness is not sufficient to be a brilliant, insightful, effective individual, but it is the most fundamental requirement.

So... if you can somehow assure that all these individuals in the "society" that "breaks down" manage to adopt sensible mental habits like this, and they are exposed to (or recognize themselves) the fundamental issues like "predator versus producer" and "causality applied to human action"... then you have a chance that humans will develop a better existence.

Unfortunately, the predators have established every mechanism they can think of to assure this never happens.  I mean, really!  Do you expect parents to stop making cutesy-cutesy associations between fiction and fun/laughter/happiness?  Knowing what I know about how human consciousness works, I must say that unless these diabolical mechanisms are broken, humans will never become sane in the single most fundamental way possible, and therefore... they will never rise above the status of predator, parasite and sheeple.

Which is one reason we're leaving as soon as we can.  One positive aspect of the human species is this.  Until recently, there have been "frontiers" on earth, and there have been a fair number of the best, bravest, brightest, most independent individuals who would leave the domination of predators if they could, and risk death to be able to live as [productive] individuals.

So there is a ray of hope.  However, the fact is, earth is almost out of frontiers, and those that remain are very difficult to live in (beneath the ocean floor, beneath the ice in antarctica, etc).

The great news... potentially... is that earth is just an infinitesimal little piece of "outer space", and humans are within a few decades of being able to leave earth and establish permanent independent settlements in outer space... probably in/on/behind asteroids, comets and small moons.  And fortunately, the nature of outer space is not one in which the predators have the advantages they do in a closed, limited environment like the surface of a planet.  First, it is incredibly difficult to find individuals in the volume of the solar-system, especially those who attempt to be invisible.  Second, the time, effort, and energy required to attempt to find, and then chase after producers in outer space enormously exceeds anything the predators could possibly hope to steal from them (even assuming the producers would refrain from destroying everything of value before they left for elsewhere, which would never happen, since the producers know those are precisely the resources the predators need to continue to chase after them).  And finally, someone coming after you in space is inherently visible (moving) and wide out in the open, and therefore a sitting duck.  You see, producers know how to create explosives too, and so can explode invaders and their weapons when they are visible, which they are in outer space.

So, part of the answer for humans, if there is to be an answer for humans, is outer space.  To hell with earth!  What I mean to say is, earth is one spectacular freaking planet... but the value of liberty is infinitely more valuable than the most spectacular freaking planet in the universe.  So... we're outta here.

Perhaps someday, when humans on earth can see what is achieved by free, productive, cooperative individuals unconstrained by predators... they will revolt.  But they will not revolt until they understand the points I made in this post and many others on ZH.  Until they do understand these points, humans are prey... and eventually, humans are finished (those stuck on earth, anyway).

Geez, I'm glad I type at warp 9.95.

malek's picture

Unfortunately I don't have enough time to write down all my thoughts... here some not completely coherent points:

whether they operate with the modus-operandi of a "predator" or "parasite"
Fully agree.

How many "liberty advocates" support following "the constitution"?
Following, or in your words feeling obligated by it, can happen in two ways: by concious decision "I like most of it and find nothing [major] wrong within it, and have BY MYSELF chosen to follow it" or by persuasion/tradition without thinking yourself "everyone does it" or "my parents/teachers/leaders told me I need to follow it".
That can then have majorly different meaning to that individual.

The fact is, predators of all species need to be treated as predators (immediate and usually lethal self-defense)
You overlook that the rules that hinder a producer from deciding and acting upon it like that him/herself, actually much more hinder predators who would much quicker act in such a way (on short-term thinking).

Do we need authority, either by performing or obeying. I say yes, how do you build a Saturn V rocket without authority in play somewhere.
However it gets forgotten that originally authority was by voluntary and *temporarily* accepting someone else as an authority.
Read Stanley Milgram "Obedience to Authority", including the epilogue and appendix.

I grew up shielded, maybe too well shielded, in the house of a rational driven producer couple.
It took me decades to untangle
- the predator/producer mystery: Why are they doing this??? Full complete answer: Because they can.
- the rational/emotional enigma: What is their rational goal? Answer: They don't have a rational one, they just want to FEEL good.

And now I realize 90% of population runs mostly on emotions.

However the biggest threat is the small group of rational predators. Unfortunately they control practically all commanding positions today.

Remember in the 60s when scientists declared along the lines of "The energy problem is solved. We will now never run out of energy, ever."
The producers reacted with Forest Gump's honesty "That's good. One less thing [to worry about]."
Only lately did I grasp that the intelligent predators (a/k/a ruling elite) took it way differently: "Nice, so *that* reality will not constrict my lies anymore by 'cause and effect'!"

You are brushing off the way small children and babies start growing up:
With the constant stream of things that they CANNOT do: too weak, don't understand, too dangerous and so on.
I read a partial sentence in a German book once, that translates roughly to "The joy of being the cause." I had to read it twice and think for 2 minutes before I got it. It was describing 4 year olds playing  "Hit the pot" on a birthday. What those children enjoy is: *Finally* I am being the reason of something happening! (the noise when hitting the pot)
In my opinion dreams/fantasies are an indispensable part of growing up, otherwise many (maybe not all) children would have mentally given up before they grow up enough to *really* do things.

Leaving the earth?
Well I watched "From the Earth to the Moon" and only that made it clear to me how completely impossible just a roundtrip to Mars is, even if we wouldn't want to land and take-off there.
Especially the "reducing redundancy for [so-called] efficiency" and "not my problem" mindsets would guarantee a disaster somewhere along the way, if tried in these times.
If the turnings theory in The Fourth Turning is somewhat correct, maybe around 2050 a mindset will surface again that could allow an attempt.

PT's picture

Excellent point about quitting your job.  

1.  It feels great, even when you have absolutely no idea where your next dollar is coming from.  You'll ask yourself, "Why didn't I do this years ago?"  Becomes very stressful when the fear of starvation kicks in, but if you gave it your best then you still won't regret quitting.
2.  No-one gets a payrise if they aren't prepared to quit.  Think of it as a game of chicken, you against the boss.  You don't quit, you lose.
3.  Most bosses don't care if you quit because there are plenty more suckers where you came from, but even the most menial task has a knack, and it takes time to get new employees up to speed.  When enough people quit, the boss might get wise. 
4.  Any idiot can make a profit by underpaying his workers and using the lower costs to undercut his competitors.  By working hard in a low paying job, you are sending the good bosses broke.  Think about it.

malek's picture

By not working hard in a self-assessed "low paying" job, you are sending a signal that for you it's all about the money while on everything else you <insert favorite expletive>. Think about it.

(And posting that on a site which main theme is the relativity of what goes as money these days - that's funny.)

PT's picture

 True, it is better to work hard, then quit and keep your reputation intact.  In theory.  If your boss treats you with disrespect when you try to do the right thing, will he really bother to preserve your reputation after you quit?

I have been working long enough to gain a thorough understanding of the return on hard work and the return on enthusiasm.  My advice to any twenty year olds out there is, DO NOT WASTE YOUR YOUTHFUL ENTHUSIASM ON AN UNGRATEFUL BOSS / CUSTOMER.  Sure, there are plenty of dickhead 20yos out there, but my advice is not for them.  There are also plenty of conscientious, diligent, ambitious hard workers that will be exploited to the point of burn out.  My message is for them.  They will try to do the right thing but they will be ground into dust.  No-one will warn them.  No-one is asking them to have an impartial look at the realities they are facing.

"By not working hard in a self-assessed "low paying" job, you are sending a signal that for you it's all about the money..." :  Funny that.  In order to make money, you must first pretend you don't care about money, to people who want to make money and pretend it's not about the money.

I don't mind playing that game.  Most people are smart enough to figure out that if their boss doesn't make a profit then there will be no extra cash laying around for pay-rises and no company expansions requiring promotions.

But there are some industries out there that are honest with their workers.  "We don't want to be here.  You don't want to be here.  But we get paid well so let's all just get on together, do a good job and have a good time anyway.  We make the client happy, they give us more work".  I like those guys.  And when you like someone, you generally try to make them happy.  And those guys pay really well.

PT's picture

Don't worry, as soon as I accumulate enough capital I will turn it into a business.  I've still got half my life left to go - plenty of time.  Every now and then I think about prematurely borrowing money with which to acquire capital, in the hope that I can learn from my mistakes before investors run out of money / realize I haven't got a clue, but I still haven't figured a good sucker to dump all my losses onto.

Consider racing.  Drive too fast, your tyres lose grip, it could be a minor spin or you could lose control and crash.  Drive too slow and your competitor overtakes you.  Now business.  Price too high and your competitors take your customers, price too low and the slightest mishap sends you bankrupt.  (Simplistic - Apologies to all the marketers out there.)

Yes, yes, I know, I think too much ... and in the wrong direction. 

Charles Wilson's picture

"Individual taxes have been jacked up, corporate taxes have been cut..."

Uh, Oh!

Here we go.  "It's FREE Tax Money!!!"

See: Ireland.  Corporate Taxes are lower than anywhere else in EuroGulag and every Corporation wants to locate there but...

Ireland is as dead as a hammer BECAUSE THE GUMMINT THERE WON'T STOP SPENDING!!!


So: Let's just Taxinate everybody AND raise corporate taxes (See: IRELAND).

Great...Just Frickin' Great.

We're all Bozos on this bus...



Wyatt Junker's picture

Lest people forget, a min. wage is actually a maximum wage.  It sets a salary cap on the more productive worker, and directs the flow of money to the more unproductive, the one with least experience who is a walk-on. 

Min wage is always just an artificial(and coercive) redistrubtion of wealth from the skilled to the unskilled, and the only reason it exists is because it acts as a floor price for the negotiating of union labor in all their future contracts.  Govts also like it because they get to siphon off more taxes.  Over time, the poor get poorer due to the effects of inflation from it and the ones with no prior job experience getting their applications passed over. 

Its a politicians' need to be the glorywhore that drives this shit on.

PT's picture

Where should I start?

A person produces one widget per day.  The machine produces 100 widgets per day.  How does the machine operator add value?  Well, I guess he can get to work early, leave late, keep his work area cleaner than the rest of the factory.  IN THE REAL WORLD, NONE OF THAT WILL GUARANTEE YOU'LL KEEP YOUR JOB, LET ALONE GET A PAY RISE.  THE FREE MARKET WAGE FOR SAID OPERATOR IS A BOWL OF RICE PER DAY AND A BED ON THE FACTORY FLOOR!  9 jobs, ten people.  The 9 hungriest get the job.  The tenth one acquires capital and starts a business selling consumerist crap to the nine guys with jobs and makes a profit of nine grains of rice per week ... fucking entrepreneurialship here we come!!!

malek's picture

Now explain to us how a minimum wage WILL GUARANTEE YOU'LL KEEP YOUR JOB

PT's picture

1.  As long as cash has to compete with ZIRP funds, we are doomed.
2.  As long as we are squashed between third world wages and first world real estate prices, we are doomed.
3.  Excess cash can be used to buy more stuff than excess grains of rice or oatmeal.
4.  Someone has to produce that extra stuff.  A bowl of rice per day and a mat on the factory floor does not pay for housing, furniture, TV sets, cars, shoes and clothes etc etc etc.
5.  When I was a factory slave, I could not afford to do further education.  After I became a tradesman, I earnt enough to also do further study and increase my skills.  Imagine that.  After I became a tradesman, I could afford to buy furniture and white goods.  Someone had to produce that stuff.  Amazing.  You think the factory slave boss couldn't afford to pay his workers more?  We used machines that allowed one man to do the job of ten.  How did society function before those machines were invented?  Did our produce cost ten times more?  Were the previous workers paid ten times less? 
6.  Honestly, I don't give a fuck about jobs.  I give a fuck about production, and the more automation the better.  If someone wants to be a bludger, let them bludge.  Just make sure the bludgers don't breed, don't do anything illegal and the workers get more than the bludgers and everything will be fine.  Some hermit who lives on the beach and surfs all day has very small environmental impact.  Does he really have to work 60 hours per week for a bowl of rice per day because there is no better way?  We've got enough automation that he doesn't have to.

PT's picture

Do Chinese bosses berate their workers - "If only you worked harder and produced more, you could make more money and compete with US and European workers and then you could actually afford to buy what you produce!"

malek's picture

And as I keep dropping in from time to time, the fun thing is this whole discussion is actually -and deliberately- completely besides the point:

If Germany has been accused of becoming a low-wage country that is mostly because the humming exports together with zero nominal wage increases for the last 10+ years help to stabilize the imploding pension system ("Rentenkasse") just so, for now.

Paveway IV's picture

So some segments of the middle class were protected - the Rentenkasse - at the expense of others. I would imagine the 'others' being blue-collar families with mortgages and retirement savings. And now the low wage-earners are being protected - at the expense of blue-collar families with mortgages and retirement savings.

Didn't the Weimar Republic already try this kind of economic shell-game in the early 1920's to keep inflation in check? That's not a jab at Germany, by any means. As an American, I just find it odd that I was constantly reminded about learning from history so society didn't repeat the mistakes of the past. The German 'lesson' was that breaking the back of the middle class buys you a little time, but has horrible consequences a few years later. I'm not talking about the 1920's hyperinflation, but the inevitable Brunning deflation in the 1930's backdropped by President Hindenburg's version of Obama Martial Law. There's a lot of different things in play here, but how is 1) the EU, 2) Germany and 3) the U.S. situation today any different than Germany in 1929?

"...Yet virtually all classes lost out when Brüning’s government reacted to a projected fiscal deficit and gold outflows in 1930 with deflationary policies. The resulting economic tailspin hurt most groups in German society. Unemployment surged among both the working and middle classes. Businessmen went bankrupt. Civil servants were either laid off or had their wages repeatedly slashed. Creditors lost their savings and debtors had their homes repossessed when the banking system collapsed in 1931. The experience of deflation made Hitler’s promises to conquer unemployment and stabilise prices by any means necessary attractive to a wide range of groups in German society, making it into a mass political movement across Germany for the first ever time in the early-1930s. The rest, as they say, is history..."

Our banks won't technically collapse, so I guess we have that going for us. But then, we simply replaced 'the banks' with 'government agencies' in the U.S. - their debt is still on its way South.

I'm not afraid of Obama martial law today as much as I fear it under President Hillary. The EU must have something similar to this, no? 

malek's picture

Well I wouldn't go so far to say the middle-class is being bled dry in Germany - actually that group's situation is becoming worse here in the US.

But the fact is the better abled middle-class folks are being kept from earning some real money, first as employee and later as self-employed, which in former times allowed some to become truly independent business owners (and not mostly bank owned by credit). That doesn't exist anymore. Almost everyone is getting squeezed just so much they don't fall in the ranks of the poor but can never achieve real savings.
And keep in mind pretty much NOBODY in Germany has own retirement savings. As it had been working OK like that since 1950 (pay-as-you-go pension system), almost no individual sees the need even.

The main reason the situation is not comparable to 1929:
At that time the majority were un-/underemployed young folks, who were desperate for change even if they didn't know exactly in which direction.
Today the majority are retirees or soon to become folks, and they want no change.

You can mostly ignore these high-level view explanation attempts after the fact such as on Brüning, they will never give you true and really fact-based hints. You need to look at original detail sources.

Paveway IV's picture

I guess I was pointing this out as more of a process of how America is collapsing. Germany is certainly in the strongest economic shape of the EU, but they will be put in an immensely difficult situation when places like Spain go under. Is Germany going to backstop the entire Euro for everyone, forever? The retirees will become part of the story if the EU goes on a Euro-printing spree and inflation heats up. This puts Germany right back in the Weimar-like situation: print to save the EU and suffer the inflation, or leave the EU and deflate their own currency? Either one results in the un-/under-employed youth - Germany just isn't that far gone yet.

I don't hope this on Germany, but they're on the Euro bus with everyone else. Spain is just sitting in the front row, and Germany is in the back. The US bus passed them about a half-block ago, and the deranged clown driving it didn't look sober (and is thought to be well-armed).

PT's picture

Geographic Wage Arbitrage For Dummies:

Buy from the cheap customers in one country, and sell to the rich workers in another country.
Whoops, sorry, got that the wrong way round:
Buy from the cheap workers in one country, and sell to the rich customers in another country. 

Now all you gotta do is find that country with the rich work- I mean customers

PT's picture

Negotiate lower wages, use the savings to build factories in cheaper countries and then sack the local workers anyway ... that plot line sounds strangely familiar.  I think someone else did that not long ago.  Oh, and negotiate a few tax breaks along the way ...

mumbo_jumbo's picture

it's becoming apparent that many corporations are passing off their responsibilty to tax payers, either companies pay wages that the worker can afford to live on OR GOVERNMENTS WILL SUBSIDISE THE WORKERS taxpayers.

walmart is a classic example of that, last i read over 50% of their workers are getting a stipend from US taxpayers.....for survival.






Alpha Monkey's picture

As is Mcdonalds, there was an interesting video of a McD's worker calling the employee hotline for help and getting told about all the various federal benefits available to her as a result of her shit wages.

Corps get more welfare than anyone...

SmittyinLA's picture

There are much better more efficient ways to raise wages, specifically limiting immigration, but limiting immigration and raising wages through market forces disposses union and political leadership, whom use labor arbitrage to buy votes.  

The wages paid in a billion dollar chip plant are irrelevant, more important is the price of their electrical bill and property taxes, and Germany is going full retard crony Socialist green energy inspite of the massive documented mafia criminal looting on the green ernergy sector in Spain & Italy.



Joe A's picture

These companies of course are no strangers to slave labor

Anusocracy's picture

Don't work for the company then. Start your own business if you think your labor is worth more.

The real slavery is to government, where there isn't a choice.

tvdog's picture

The CDU/CSU won a phenomenal victory in September, but not an absolute majority. To govern, it must form a coalition. Erstwhile coalition partner, the FDP, got kicked out of parliament. Now Merkel’s clan is negotiating with the left-leaning SPD, runner-up in the elections, to form a Grand Coalition.

Before the election, CDU, CSU, and FDP had a center-right coalition with a working majority. After the election, FDP is gone (having reneged on a promise to cut taxes), and CDU/CSU are the minority. The majority consists of leftists: SDP, Greens, and Left Party. How is that a "phenomenal victory" for Merkel and her side? The leftists could form a working coalition tomorrow but for the fact that everybody refuses to deal with die Linke.

moneybots's picture

"Germany has been accused of becoming a low-wage country. For a reason. Workers – from doctors to cleaning staff – have watched their real wages decline for years"

"These “instruments of flexibility” have worked well: record corporate profits, fabulous bonuses for the top echelon...  On the other side of the ledger: strung-out workers who cannot afford to spend or save money they’re not making.

Reads like it could be the U.S.

Oliver Jones's picture

I'd worry more about abolishing AüG (Arbeitsüberlassungsgesetz) than about imposing minimum wage: A Freiberufler in Germany is pretty tax efficient, but AüG forces people to accept wages a slave would blush at, or paint a large target on their back, saying "Fire me! I'm expensive."

Unfortunately, many employers choose to make contract openings AüG-only, which ensures that talented workers won't come anywhere near them.

AAA21's picture

What a load of Socialist crap! Wolf Richter is a Statist A-hole. Never forget the 10 Commandments of Government:

1.- Generally speaking, government always grows -- it never shrinks -- whether times are good or bad.
2.- In each area it purports to "assist", government attempts to replace individual decision-making with central planning.
3.- In order to implement its grand central plans and solidify its power, government must take from one citizen to give to another; this is, in effect, lawful theft.
4.- No matter how many times central planning fails, the self-appointed masterminds in government assert that "this time is different" and that with only a few tweaks and more money, their delusional plans will succeed.
5.- Because it uses funds confiscated from taxpayers, self-restraint is no obstacle to government's ambitions.
6.- Its fundamental misunderstanding of human nature notwithstanding, government must claim to grant "rights", which require it steal the labors of one citizen to give to another (such as food, shelter, employment, and health care).
7.- No matter how widespread the harm it causes, government will never provide an honest and historical accounting -- a report card -- of its failures.
8.- As more individuals and families are harmed by the failures of central planning, government must find suitable scapegoats, must lie to do so, and therefore must also repress dissent.
9.- In order to build its network of redistribution and grow a culture of dependency on its services, government must inevitably undermine the family unit, religion, and the notion of God-given rights in order to cow, bribe, or intimidate its citizens.
10.- As government grows ever more powerful, it must also become increasingly oppressive through compulsion and force. To do otherwise would mean government must shrink, and this it cannot do.

Sonic the porcupine's picture

You got an up arrow from me, not a lot of free-market thinkers commenting/arrowing on this article so far!

Anusocracy's picture

The typical doofus is not smart enough to understand that government screws up everything as well as it is screwing up healthcare.

Paveway IV's picture

The sad part about the scheme: it keeps working - over and over again. People will always try to front-run a government-by-Ponzi, figuring that they can get out before they're stuck holding the bag. These things have legs. It's hard to sit on the sidelines and see so many feeble-minded jump in, gorge themselves and bail out wealthy.

You have to wonder if you're the bigger chump for NOT bellying up to the feeding trough. The early suckers are the only ones avoiding the slaughterhouse. The late suckers AND the ones that do nothing are both going to end up there. What did you ever have to lose?

See how that works? The end-stage of the social psychopathy cycle is when the last healthy people start having regrets that they did not succumb. Then there's a big war, a lot of dead people and then a new cycle starts with a shiny, new government... cause things will be different THIS time. 

ronaldawg's picture

Not a non-subsistence minimum wage, of the kind favored by the US government, but €8.50 ($11.50) per hour

Uh - minimum wage in California is $10.00 - so they make there's $11.50 and that is non-subsistence?  $1.50 more an hour?  really?