Export-led growth structurally demands wage suppression and anti-inflationary monetary dominance

Evidence

Germany’s economic profile as a late developer has always been export-oriented manufacturing; so it was natural for Germany’s postwar economic elites to focus on the reconstruction of export capacities and the recovery of export markets as a way to achieve the rapid growth they sought. Ordoliberals may have sought to preserve smalland middle-sized firms and feared cartels, but they had no problem with large firms per se, especially those that were able to produce export-led growth. But export-led growth requires a strict policy of cost competitiveness, which in turn requires wage control through the restriction of consumption and a strong anti-inflationary stance. This further strengthened the hand of the monetary authority over the fiscal authority, as controlling inflation became the monetary complement to ensuring competition. — Mark Blyth, Austerity, 368

Categorization

• XREF: This is the structural mechanism behind the German export-surplus orthodoxy that drove austerity in the Eurozone crisis — the core Mattei connection and the mechanism Europe later exported. — connects to: Currency devaluation causes import inflation and cuts real wages — Mark Blyth, Austerity: The History of a Dangerous…, 210; Expansionary adjustment required cuts plus wage moderation plus prior devaluation — Mark Blyth, Austerity: The History of a Dangerous…, 464; Unemployment functions as the pivot keeping labor markets within exploitative limits of capital dominance — Clara E. Mattei, Escape from Capitalism, 256 (+10 more)
• SEED: Angle: the export-led growth model’s built-in wage-suppression logic as the forgotten structural root of the Euro crisis surpluses.

Broader Connections

• Higher unemployment suppresses wages and dampens inflation. #expands (0.88) — Clara E. Mattei, Escape from Capitalism, 271
• Unemployment functions as the pivot keeping labor markets within exploitative limits of capital dominance #expands (0.85) — Clara E. Mattei, Escape from Capitalism, 256
• Austerity enforces the wage-labor relation that capitalism requires for growth #expands (0.85) — Clara E. Mattei, The Capital Order, 29
• Rising wages reflect monetary conditions rather than union coercion causing inflation #corroborates (0.82) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 976
• Austerity economists read inflation as a threat to capitalist subordination #expands (0.80) — Clara E. Mattei, The Capital Order, 784
• Global wage suppression was engineered to boost dollar profit rates #expands (0.78) — Yanis Varoufakis, Technofeudalism, 199
• Anti-inflation policies sparing workers require challenging capitalism’s foundations #qualifies (0.75) — Clara E. Mattei, Escape from Capitalism, 278