Hartmut Elsenhans and a Critique of Capitalism

Conversations on Theory and Policy Implications

Neil Wilcock, Corina Scholz

• Publisher: Palgrave Macmillan
• Year: 2015
• ISBN:
  9781137564641
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

This book presents a series of interviews with Hartmut Elsenhans on his wide-ranging theories and their policy implications. Serving as a compilation of his distilled thoughts, we discuss with him his unique world economic theory, his theorisation of social movements, his work on overcoming underdevelopment, and much more.

1

Introduction

Synopsis

This book presents a series of interviews with Hartmut Elsenhans on his wide-ranging theories and their policy implications. Over the course of several interviews, we discuss his individual theories on marginality, rent, development, underconsumption, his idealised model of global capitalism, nongovernmental organisations (NGOs), social movements, the European Union (EU), and himself. Elsenhans is an old-school intellectual in the sense that his academic hinterland is vast and the stances he takes are uncompromising and independent. We hope this book will serve as a gateway to his complex theories and function as an introduction for both students and scholars new to his work. We bring together, for the first time in one volume, Elsenhans’ thinking across his range of interests, acting as a compilation of his distilled thoughts. We have not diluted his theories, keeping their essence but putting them in simpler English while using examples to illustrate Elsenhans’ views. Whether discussing the reasons behind the economic slowdown, the future of the nation-state international system, or how the Eurozone crisis can be resolved, what stands out is Elsenhans’ bold and thought-provoking ideas, and the unusual places he finds solutions.

Purpose of the Book

In his long and prolific career, Professor Hartmut Elsenhans has published numerous books on a host of issues from Algerian independence to social movements in the developing world to development theories and, more recently, the first of a six-volume book series on his global economic theory. One would think that to add another publication of Elsenhans’ work might be a redundant exercise given his extensive list of publications. However, through spoken interview our approach deals with his work in a new and unorthodox way. The plethora and variety of articles, reviews, conference papers, lectures and books by Elsenhans lead to a common complaint that his writing was lacking in clarity. This book is an opportunity to right that wrong and produce a clear-cut overview of Elsenhans; insights which stand out for their clarity.

Our experiences as former students of Elsenhans, in and out of the classroom, convinced us of the usefulness and quality of the insights we would cover. However, we wanted to have these exchanges in a language that was more rudimentary than in Elsenhans’ writings. Ulrich Menzel, in a review of his work, sums up the dilemma:

Unfortunately, he keeps getting in his own way. The complexity of his language reflects the complexity of his line of argument, even in English. To do justice to the argument, the reader must be as well-read as the author (Menzel, 2013).

We hope to appeal to anyone with an interest in any of the ten chapter topics. The goal has been to condense Elsenhans’ work to the point where an enthusiastic undergraduate could reasonably begin, but never to the point at which the ideas would be diminished. We are in an advantageous position to provide this perspective as it largely replicates where we started when we first encountered Elsenhans as students. What struck us was the depth of knowledge Elsenhans possessed, which he recalled effortlessly to back up a point, and also the originality of his thoughts on a wide range of subjects, which was placed within the point’s relevant state of the art.

When communicating his ideas in lectures to new audiences, Elsenhans took a step-by-step approach, which allowed for categories to be defined and from which more complex conclusions would be drawn. The spoken word can simplify ideas that, in written form, are expressed in a more convoluted form; therefore, we knew interviews could help us condense and concentrate Elsenhans’ thoughts. We chose the themes of the chapters to introduce Elsenhans’ main theoretical interests in his Capitalist World System theory, envisaging that each subject would add to the comprehension of the others. The later chapters were chosen with regard to some of the political applications of his theories; for instance, he has published widely on social movements and the EU. It will allow for others to experience an intellectual engagement that was gradual in progression but also straight to its conclusions. The interview form afforded an opportunity to increase interactions on the topics of discussion, allowing us to shape the conversations and ask the questions he has not covered in his writings.

The topics are varied and wide ranging, which reflects the prolific career and interests of the interviewee. Elsenhans can claim to be a prominent voice in a variety of discourses, including the Algerian independence revolution, social–political movements in Asia and Africa, and development studies, but his interests are far more extensive than set academic disciplines and interrelate across the social sciences. His approach is based on theoretical interpretations and – a gift for interviewers – always with policy suggestions to support them. He advocates development through countries weakening their exchange rates to support export policies, that the solution to the Eurozone crisis isn’t Greece’s exit from the single currency but that of Germany and its return to the Deutsche Mark, and the ‘state classes’ of developing states should prioritise wage increases of the poorest given full-employment capitalism came into existence and can only maintain itself through an empowered labour force.

We were attracted to Elsenhans’ approach given that it appeared to combine the best of old-fashioned scholarship – diligent preparation, widely researched, on specialties fuelled by personal experience – with a purpose that was timeless and universal – changing the discourse in order to advance human freedom, economic or otherwise. His metalevel analysis caught our attention, as we studied and discussed one issue it would soon be related to other phenomena, which would, in turn, serve to illustrate a broader pattern. Our backgrounds are in interdisciplinary social sciences, which made this cross-pollination thinking attractive, especially given that the conclusions Elsenhans makes are bold and far-reaching.

The beauty of a set of interviews over a wide range of topics is that the text is not based on a single idea, recycling that idea over and over; on the contrary, there’s an abundance of ideas and thought experiments within these pages. Whatever this publication may lack, it will not be a shortage of varied and fresh ideas from chapter to chapter. Just as in the lectures, we were struck by the originality of Elsenhans’ ideas, not just in his economic interpretations but in his commentary on current events. These reminded us that there is a need to challenge a rigidity of ideas as much as a rigidity of interests in established discourses.

Elsenhans has had a career extending far beyond Germany, with teaching posts in Pakistan, India, the USA, Algeria and Canada. His academic career has also ventured into the political world, with stints in the Ministry of Planning in Algeria in the 1980s, and seeing from the inside India’s governing party in the 2000s. Added to this a family life with origins from Nepal, our subject of interest is able to use examples from personal experience from a variety of places when he worked as a scholar or an advisor.

As ever, with the passages, it breathed with ideas and opinions that would inform and provoke. As the book deals with so much of Elsenhans’ core beliefs and thoughts, many of them are backed up by personal experiences and anecdotes. We aimed for these personal insights to alleviate the denseness of the subject matter while giving a better sense of the perspective of the interviewee. Infused throughout are personal reflections, lending insights dating back through the decades since growing up in the early postwar period in Baden-Württemberg, Germany. Brief glimpses emerge of his character, his life story and his noted sense of humour.

Elsenhans’ openness and readiness to take on any question led us to find out not just what he thought, but also why. Given that we always found our subject of study interesting, we were able to uncover his perspectives on religion, culture and history, which are not areas of his formal academic interest and on which he has never made any public record. This gives some personal insights into the contributions he makes.

We do not expect the ideas exchanged to sit well with everyone, for instance the unflinching take on the role of NGOs or his criticisms of monetary Keynesians, who he believes are leading a weak protest to economic decisions. However, we were happy to open and challenge ourselves to these more radical views and pass them on to the reader to face as we have. Such free thinking brings with it obvious opposition, but critics would find it hard to argue with his capacity for knowledge and his quick mind, which has produced a voluminous body of work.

Our aim was to direct the conversations in ways that spell out the main tenets of Elsenhans’ theories while contextualising them where it seemed necessary. In ‘General Thoughts on Capitalism’ (Chapter 7), Elsenhans reflects on the contribution of Karl Marx, John Maynard Keynes, neoclassical economics and World Systems Theory, which will be of equal interest to the novice and the expert. Elsenhans made it clear that he did not have a mentor or one hugely influential figure in the genesis of his thinking – his theories came from his time spent researching and developing his own direction, but he lends from each of those economic pillars to varying degrees.

For those with a social democratic outlook, Elsenhans’ positions will be of high interest. There is nothing dated about the debates he addresses within this book; they are the fault lines of our time, and his opinions on those fault lines are radical and deserve due consideration. Considering socioeconomic problems in a novel way, we hope this publication can act as a potential departure for future engagement with his theories. With the latest big ‘truth’ of the last century to fail spectacularly – market fundamentalism – the time to consider new outlooks in the field of economic policy is now; Elsenhans makes his contribution by offering new and bold solutions amid the challenges of globalisation. This book can function as a clear and concise introduction to a range of topics, serving as an entry point for those wishing to access the scholar’s main theoretical contentions, covering rent, social movements, marginality, development studies, Europe and beyond. As hopeful as we are of providing a distillation of the scholar’s theorisations, it will not replace interested parties from going on to read Elsenhans’ original work. We were left with quite some excess of interview material by the end of editing, much of which would be of further interest; however, to arrive at a coherent chapter structure, this was a necessary organisation.

With this in mind, we acknowledge restrictions in depth and analysis in the subjects we cover. Where the spoken word gives the possibility to simplify and condense, it brings with it the drawback of being unable to provide sufficient support and evidence for each idea proposed – of which there are sometimes many on each page. This publication is an exercise in simplification and understanding rather than a critical analysis, which explains the omission of tables, graphs, or mathematical formulae within. We accepted this trade-off between a plethora of interesting and challenging ideas on the one hand, and an inability to explore and scrutinise them sufficiently at times on the other. It is up to the reader to decide if we have found that balance, but we were cognisant that our main aim as editors was to present those big sweeping ideas.

Let us be clear, in the lectures and the interviews that have gone on to form this text, where we had differences of opinion or could not wrap our head around his ideas, we challenged him and were honestly critical. Not all doubts could be resolved, and ideas were exchanged that we did not agree with and there were areas that we had huge difficulty with, but that is for the reader to make up their minds on just as we have.

Despite Elsenhans’ mother tongue being German, the interviews were conducted fully in English and as Elsenhans speaks solid English it allowed for a fluid exchange of ideas. We all agreed that we would like this book to be published in English in order to reach the widest possible audience. We were also much more familiar with his publications and the terminologies he uses within them in English. None of the interviews are verbatim quotes and were fully edited by us in order to present the most lucid text we could without going as far to change any of the meanings in the answers. Elsenhans read all the edited interviews and was given the opportunity to edit the content.

Layout of the Book

The topics chosen were done so on the basis of covering the main theoretical economic issues that, when combined, go some way to outlining Elsenhans’ Capitalist World System theory. The chapters on ‘Rent’ (Chapter 2), ‘Marginality’ (Chapter 3), ‘Overcoming Underdevelopment’ (Chapter 4), ‘Convoy Model of Globalisation’ (Chapter 5), ‘An Underconsumption Crisis’ (Chapter 6) and ‘General Thoughts on Capitalism’ (Chapter 7), are interconnected to the extent that, taken alone, they will not capture holistically his theory but read together will relate ideas and cross-analyse to create an outline of his Capitalist World System Theory.

The content of the book covers Elsenhans’ theories widely. He has a wide range of academic interests and we have tried to cover the subjects we judged he had the most interesting perspectives on, extending beyond his economic theories to distil his thoughts on sociocultural movements, the environment, NGOs, culture, and his personal philosophies. Most previous commentary or summaries of Elsenhans’ work have not had the chance to let the author answer himself, so the chapters are novel in their range of topics, as well as their content.

All chapters can exist in standalone format and be read with respect to its subject, but there are interlinkages that will supplement the content of other chapters, particularly the economic subjects. The sequences of questions in each chapter are designed to lay the ground for later exploration, which frequently involved beginning with definitions of terms. Defining may seem a needless exercise but much of Elsenhans’ theories are couched in extensive definitions of terms conceived of differently in mainstream discourse, a notable example being marginality. We found that without doing so there would be subsequent confusion, and bringing out the precise definitions was crucial to formalising Elsenhans’ interpretations.

The book can be thought of in two halves, the first half as being more theoretical and purely economic, and the second half being more wide ranging and more political. We considered Elsenhans’ economic theories to be of widest academic interest and unique to him, which is why we placed them in the first six chapters following this introduction. Chapters 8–11 are less concerned with Elsenhans’ economic theory and encompass subjects of political application. He is openly of an economic viewpoint, hence the need to spell out the infrastructure of that thinking to understand his perspective on other subjects. Although he has published less on noneconomic subjects, we found there was just as much, if not more, sustenance of intellectual curiosity in the second half of the book. While the first half of the book involves much discussion on definitions and contextualising his theory, the second half is more revealing in showing the political consequences of his thinking.

Content of the Book

The first interview (Chapter 2) is ‘Rent’, which Elsenhans defines as ‘the surplus appropriated by political means … and not used for mass consumption’. We began with rent as it serves as a handle to explain his interpretation of the modern economy. He categorises rent in contradiction to profit, the other type of surplus, which serves as a motor for growth. Rent is appropriated through political guarantees, whereas profit is earned on markets under the condition of competition.

Chapter 3 is ‘Marginality’, a categorisation Elsenhans gives for the existence of part of the population that cannot produce as much as it needs for its survival. The marginals are those whose productive capacity is less than what it costs to employ them. Elsenhans’ contribution in this regard is to introduce a dim perspective of labour in the production process, believing much of labour today is not value creating, which is in contrast to all other perspectives, from the neoclassical economists to the Marxists.

Chapter 4 is ‘Overcoming Underdevelopment’, linked umbilically to Chapter 3. Elsenhans sees marginality as a consequence of mass labour surplus, therefore development solutions lie in creating the conditions in which labour is in high demand. Elsenhans explains that the answer is in the focus towards mass markets as without them there is no interest in developing technologies to satisfy a demand that does not exist.

Chapter 5 is entitled ‘A Convoy Model of Globalisation’, which is Elsenhans’ idealised model of global capitalist development. It is a global economy of expanding mass markets that stem from the production of new products available to the mass of the population: a pattern of globalisation where economies falling behind do not suffer from unemployment but only experience deterioration in their terms of trade due to a temporarily devalued currency.

Chapter 6, ‘An Underconsumption Crisis’, is an explanatory chapter in which Elsenhans describes the ailments of the current global economy. An underconsumption crisis, which he believes we are experiencing now, has the hallmarks of a weakened negotiating position of labour, wages that have not kept pace with productivity increases, weak demand caused primarily by lack of reinvestment, and consumers preferring to save rather than spend in the face of dim economic prospects.

Chapter 7, ‘General Thoughts on Capitalism’, is where we ask him to put his economic theory in context, with particular reference to John Maynard Keynes, Karl Marx, neoclassical economics, and World Systems Theory. He explains w...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Foreword by Hartmut Elsenhans
• Preface and Acknowledgements
• 1. Introduction
• 2. Rent
• 3. Marginality
• 4. Overcoming Underdevelopment
• 5. A Convoy Model of Globalisation
• 6. An Underconsumption Crisis
• 7. General Thoughts on Capitalism
• 8. Nongovernmental Organisations
• 9. Europe, the European Union and the Eurozone Crisis
• 10. Social Movements and New Cultural Identitarian Political Movements
• 11. Career, Criticisms, Creed and Other Issues
• Notes
• References
• Index