ANOTHER ECONOMY IS POSSIBLE

An Economy for Justice, Peace and Creation

By Franz Segbers

[This address at the Eisenbach Kirchentag (church day) May 13, 2007 is translated from the German on the World Wide Web,  http://elisabeth.ekmd-online.de/portal/kirchentag/03-texte/3716.html?print=1.]


I speak to you as someone born in West Germany. I was born and grew up in one of the most prosperous regions, the Ruhr. The heart of the greatly praised economic miracle beat here. My hometown Geisenkirchen was a center of coal and ore. The lights will never go out in this “city of 1000 fires” as people said proudly. We always went forward. Always! No! I remember miners from the mines marched through the streets with black flags and protested against mine closings and short-time work in 1966. Vast money was pumped into structural change in the region. But all this did not help at all. Mine after mine was closed. The unemployment rate continued to rise. That rate is now more than 20 percent and over 50 percent in some old work districts. The residents move. Despite millions in incentives, work and income cannot be assured for everyone. When I went to school, over 300,000 residents lived in the city. Now there is a fifth less. Do you know that? Are our biographies which began so very differently now readjusted in reunited Germany?

I. THE TURN IN NOVEMBER 1989

In the same month when the Berlin Wall fell in November 1989, the first poverty report was published in the Federal Republic of Germany under the title “Reason for Shame.” This poverty report was ventured in the giddiness of the reunification. No one noticed it. However its message sounds clearer now. This rich land of Germany is deeply divided. This is a reason for shame. The former DDR’s (East Germany) entrance in the Federal Republic of Germany was an entrance into an already deeply divided society.

In 1989 the time had come to carry out that economic- and social-political change of paradigms against which a resistance had already formed in the old Germany. Politicians and economic decision-makers utilized the chance of reunification to set different points. A turn had occurred before the turn. Since 1982, economic- and social policy was rearranged by the neoliberal supply policy pre-tested by Thatcher and Reagan. The ’89 turn was only a catalysor that reinforced the basic point configuration of the ’82 turn.

In the following years, the social-political landscape was reorganized step by step: social cuts, relief for the entrepreneurial economy, decision of the Bundesrat (Upper House of the German parliament) against the 35 hour week, changes in the youth work protection law according to employer desires, a tax reform benefiting higher incomes, introduction of health insurance premiums for pensioners, introduction of privatization of the postal service, higher consumer taxes and a health reform law with additional burdens on patients.

Up to 1989, the welfare state was already converted. Since then, this has intensified even more: division of society, dismantling of the welfare state, cuts in the health system, privatizations, reforms in working hours and weakening of the unions.

NOVEMBER 1989: ENTRANCE IN A DIVIDED SOCIETY

The Federal Republic of Germany was already extremely split in 1989. In 1989, the bottom third of private households had 16% of the total income; the top third had 57%. The gross income from business activity and assets increased twice as strongly between 1980 and 1989 as income from dependent labor. The corrected wage rate fell from 65% (1980) to 56% (1989) and has reached the level of 1960. In 1989 the disposable income of an independent household was four times as great as the income of an employee household. The available income of private households rose thirty percent from 1982-1989 while the money assets of private households doubled in ten years (1979-1989). This unparalleled economic upswing also had its shady sides: an unprecedented opening of the gap between those sharing in this development and those marginalized and excluded. In 1989 there were over two million unemployed in the midst of an economic boom. Nearly 40% of them received no unemployment benefits. The number of income support recipients set a record. Almost every third person cites unemployment as the reason for his or her plight. The pressure on the labor market shifted into the enterprises. Holidays and social benefits came under pressure. Despite these statistics, the former German economics minister Norbert Blum claimed in September 1989: “We Germans have never had it so good.”

Since then, the gap between poor and rich has expanded considerably. A quarter of the assets belongs to 360,000 persons. The two richest men in Germany, the Albrecht brothers as owners of the Aidi-chain north and south, have private assets of over 30.6 billion euro. Whoever thinks two superrich says little about the wealth distribution will learn from the 2nd poverty- and wealth report of the German government that 10% of the population has 47% of the net assets. On the other side, the poorer half of the population, 50% of the citizens of this land, only possess 4% of the total money assets. Whoever wants to fight poverty must change this discrepancy.

Germany is at the peak of its wealth development. This land was never as rich as today. Simultaneously inequality increases. Poverty has returned. More than two million children in Germany live under conditions of income support guaranteeing the subsistence level. Seven million live under the conditions of Hartz IV. In the new territories, everything is even more pointed. Poverty is greater and the gap between poor and rich is deeper.

NOVEMBER 1998 – ACCESS IN AN UNDERMINED SOCIAL MARKET ECONOMY

The collapse of socialism awakened the long-tested formula of the “social market economy” to new life. The state contract on the creation of a currency-, economic- and social union between the Federal Republic of Germany and the DDR defined the social market economy “through private property, performance competition, free price formation and full freedom of movement of labor, capital, goods and services” (Art 1, par 3). The contract identified the “principles of the social market economy with the free decisions of entrepreneurs over products, quantities, production processes, investments, working conditions, prices and profits” (Art 11, par 2). For East Germany, the social market economy was defined in the sense of extreme neoliberals from the beginning. The new territories were not left unclear about which economic concept would have a chance.

II. THE TURN IMPULSE AND THE CONCILIAR PROCESS FOR JUSTICE, PEACE AND PRESERVATION OF CREATION IN EAST AND WEST

The ecological question moved into the center and shook the unbroken and unquestioned faith in progress in East and West when the Club of Rome published its 1972 report on the limits of growth. Environmental groups arose in the East and the West. The peace motto “Swords into Plowshares” and protests against stationing missiles united East and West. Finally, the North-South conflict moved more and more into the foreground since the 1960s, the struggle for justice for the impoverished and for a just world economic order that capitalism could not achieve. All these challenges allied groups and churches in East and West from 1987 to 1989 in the conciliar process for justice, peace and preservation of creation. Thus another kind of reunification occurred before 1989: the common shared struggle against injustice, discord and destruction of creation in East and West by concrete capitalism and concrete socialism. When the ministerial for state security received the texts for this conciliar assembly in Magdeburg and Dresden, it wrote this was “the most burning catalogue of demands regarding the social-political changes in the DDR.” In fact, a change impulse in society started from this assembly. The ecumenical assembly was the overture to the 1989 fall revolution. The protagonists of the fall 1989 sought more than merely the turn to the capitalist West. They sought an answer to the crisis-syndrome of the modern age that resulted from the absence of a world peace order, an unjust world economic order and an ecologically catastrophic unquestioned faith in progress and growth.

What resulted was opposite to the three primary obligations of the ecumenical assembly: Instead of a turn to more justice in the welfare state, the capital interests prevailed. Instead of a priority of nonviolent conflict resolution, former German chancellor Schroeder spoke of a “de-tabooing of the military.” Instead of a turn to preservation of creation, the capital interests for economic growth and jobs prevailed against the creation. Full of fright, we recognize that the polar caps are melting, temperature rises menacingly and destruction of creation advances rapidly.

TURN INTO THE CUL-DE-SAC

The upheaval in Eastern Europe is largely understood today as catch-up modernization. Under the communist regimes, Eastern Europe was screened from the world market and from technical, economic and political modernization. Hopeless and intolerable backwardness had to be reversed. Eastern Europe was to be a model neoliberal student by catching up and moving toward the West. While people in Eastern Europe were occupied with a catch-up race, the West imagined itself as superior in setting the direction. With the tone of the victor’s certainty, Francis Fukuyama, the advisor of US presidents, spoke of an “end of history.”

The specter of communism has receded. Now the specter of fear flits about in Europe. Appealing to supposed laws of the market, an economic order governs that stops at nothing. This order creates an inconceivable abundance of wealth and goods but fails in justly distributing this wealth and abolishing hunger and poverty. We witness a return of feudalism and a wealth economy that no longer works for “riches for all” according to the motto of the social market economy. Now “more and more wealth for a few” seems to be the priority.

We have entered in a globalized economy which is a world of anarchy – without rules, without laws, without social understanding, a world in which businesses and big banks can operate unregulated. The ugly grimace of an immoral and even economically misguided capitalism is blatant when stock prices and manager salaries increase the more people are rationalized away.

Now we stand disillusioned before a scrapheap. The promised triumphal end of history may come true every differently than its protagonists thought. Four million unemployed, more than six million Hartz IV recipients and more than two million poor children pass a crushing judgment.

THE WORLD CREATED BY THE PLUTOCRATS

1. Instead of an option for the poor, the poor become poorer and the rich ever richer. Every year “Forbes” magazine publishes a list of the rich. A few days ago the publisher of Forbes said in presenting the numbers: “This is the richest year in the history of humanity. Never before has there been such an increase in wealth.” In 2007, “Forbes” counted 946 billionaires; in 2006 there were only 793, an increase of 35 percent.

A new feudal class forms, the plutocrats. To the analysts of Citibank, the world economy increasingly has the character of a “plutonomy,” a wealth economy in which the rich and well-to-do appropriate an ever larger share of the social wealth.

The plutocrats are extremely successful in the times of globalization. They create more and more wealth and concentrate ever larger shares in fewer and fewer rich. Globalization divides societies worldwide in winners and losers. The losers are superfluous, the new “underclass.” In times of globalization, there is no “elevator effect” (Ulrich Beck) any more lifting all social strata but rather a “Paternoster (Lord’s Prayer) effect” (Christoph Butterwegge). When one goes up, the others go down. This expropriation economy expropriates downwards and makes a killing upwards. The rich become richer and the poor poorer.

The owners of capital gain a larger share in the distribution of the national economy. National income rose 13 percent. The capital side took 38 percent of this growth while a meager 4 percent was left to employees. Agenda 2010 and Hartz IV force unemployed to labor markets that do not hold ready adequate jobs. They compel people to accept work at any price changing the unemployed poor into the working poor. A superfluous “underclass” of low wage earners without chances is entirely excluded from the labor market and social participation. This division threatens the democratic substance of a society because it accepts the exclusion of part of society. Six to eight billion euro are annually withdrawn from the unemployed and lower income persons through Hartz IV and Agenda 2010 – a sum annually enriching the top taxpayers. In 2007, Hartz IV recipients were expropriated of income through higher taxes.

The ruling class has encouraged a worldwide tax competition downwards in the scope of globalization. Tax competition is the legal means for a “fiscal redistribution from bottom to the top,” as the report of the Enquete commission on Globalization of the German Bundestag said. The rulers refer to the practical necessity of globalization to make invisible their political responsibility for the conditions and to steal away from social responsibility. They hide the fact that globalization is only the global expansion of capitalism. Germany is a driver and profiteer, not a victim or driven object.

Amid inconceivable wealth and surplus, the plutocrats organize shortage for the many. Globalization means: giving plutocrats the whole world for their global strategy of greed. Poverty in a rich society is an avoidable scandal, not simply a scandal. Objective shortage is defeated for the first time in the history of humanity. Jean Ziegler, special ambassador of the UN for the World Food program, summarizes this absurd development as follows: “A child who dies of hunger is murdered.”

2. Instead of an option for nonviolent conflict resolution, there is a strategic option for waging wars.

The US has waged two Gulf wars since 1989. The battle over scarce resources is increasingly fought with military means. In the “2006 White Paper on Germany’s Security Policy and the Future of the German Army,” we read: “A secure energy supply is strategically important for the future.” The new military doctrine consists in ensuring economic goals: preservation of national prosperity, free world markets, free transportation routes and secure access to raw materials.

3. Instead of an option for the preservation of creation, there is destruction of the foundations of life.

This is the same logic that exploits countries and plunders nature. To illustrate the destructive dynamic of recent times, the earth loses around fifty animal- and plant species every day through destruction of their living spaces by human settlement. But if increased economic growth is the explicit goal of trade liberalization and if location competition of states hinders crucial measures in controlling resource consumption, the obvious conclusion is that globalization is causally connected with the intensification of ecological crisis.

Developing- and threshold countries are the main victims of climate change. The poorer and weaker the people, the fewer are their possibilities of eluding the consequences of climate change. As long as the cheapest wins on the world market regardless of what the product does, exploitation of people and creation remains the key to success. Mines in China without labor protection and union rights and child labor in the quarries are always cheaper than socially protected labor in Europe.

Our lifestyle based on wasting energy and resources will have to change. Changes will only be accepted with social security. This is not possible with Hartz IV and poverty pensions.

In conclusion, we have reflected on where we stood in the East and West before the turn. The turn brought the end of command socialism but threw us back in the search for a peace-oriented social and ecological economic system. In Basel, ecumenical Christendom declared at the First European ecumenical assembly in May 1989: “We are conscious of the deadly threat facing humanity today. However God is a God of life who does not give up on the work of his hands. God calls us to desist from injustice, violence and exploitation. God’s call to conversion is the door to life.”

The turn that is imminent is the turn to a helpful economy.

We need a turn that does justice to God’s call to conversion. The ethical models of a conversion to an economy that serves life are: justice, peace and preservation of creation. The economy can do justice to economic ethics. The economy may not dominate life but must provide the means of life that are necessary for life. The biblical and Jesuan sentence proclaims: The Sabbath must serve the person; the person must not serve the Sabbath.

1. AN ECONMY THAT SERVES JUSTICE

After 1989, people acted in the East and West according to the motto: the opposite of the false is the true. In fact, the planned economy as practiced was the false. However the free neoliberal market is not the true. The question is: How can the global economy be brought under political control nationally and globally?

The basic presupposition of all strategies of change is the primacy of politics which all conceptions of economic ethics make their starting-point. The former president of the German Central Bank Hans Tietmeyer said: “Most politicians are not yet clear how much they are already under the control of the finance markets and are even dominated by them.” The fact that underlies Tietmeyer’s statement must be our starting-point: either politics and democracy are abandoned by seeking the confidence of the finance markets or the market is organized in a human way. We may not fall into the neoliberal trap that politics cannot act. Then we would admit the neoliberals were right!

Politics must not justify itself in relation to the location interests of capital but in relation to the people who live in these locations.

2. AN ECONMY THAT SERVES PEACE

An ecological conversion of our industrial society is a question of survival. What is ecologically absurd is also economically absurd. What secures our foundations of life must grow. What endangers life, reduces our quality of life and blocks the future of coming generations must shrivel. The dominant economic mode is based on resource waste and resource exploitation of oil. However we all know: oil resources are limited. At the beginning of 2006, the former Shell executive and current professor at Princeton University Kenneth Deffeyes recalled January 24, 2005, “World Peak Oil Day,” the day of oil. According to his calculations, maximum worldwide oil production was reached that day. Half of the oil was consumed in less than 200 years of the oil-based capitalist economic system. In 2040 the end of crude oil production can be expected, in 2050 the end of natural gas and in 2060 the end of uranium.

The peace task is completely new in times when the German army is directly and indirectly joined in a worldwide distribution battle over access to resources. The insight of the conciliar process that no peace is possible without justice now proves true. The biblical vision of Isaiah becomes a contemporary time-check: “Then justice will dwell in the wilderness, and righteousness abide in the fruitful field. And the effect of righteousness will be peace, and the result of righteousness, quietness and trust for ever” (Isa 32, 16). This vision is a counter-program to the prevailing conditions where security ideologies are uncoupled from justice and even tied to belligerent actions in undeclared wars and in worldwide deployment of special commandos.

In conclusion, the necessary changes cannot be realized politically and socially with poverty pensions and Hartz IV. Environmental policy needs social justice. Justice and peace are inseparably connected. Justice is the condition of peace.

3. AN ECONOMY THAT SERVES CREATION

The possibility of the globalized economy was put in question by the 1991 memorandum of the Evangelical church in Germany “Public Interest and Self-Interest” which after praising the market economy as a success model declared:

“The earth, seen ecologically, cannot bear an extension of living conditions in industrial countries to the whole world. This insight is growing. On a global scale, neither the energy- and resource consumption nor the pollution emissions in the industrial countries are compatible with creation. The question of social justice is raised all the more urgently in view of the inequality of current living conditions.” [2]

This explosive text means: A universalization and globalization of the market economy is impossible because an ecological collapse would occur with a worldwide expansion of industrial living conditions. Concretely, if only China with its population of over a billion people reaches the living standard of western industrial countries, for example the same number of cars, this would be a sheer ecological catastrophe. The current raw material shortage is only a modest foretaste of distribution conflicts that can be expected. In industrial countries, the ecologically necessary climate protection can only be realized if the social trend changes. The necessary measure of change will only be accepted with social security. This is not consistent with neoliberal labor policy a la Hartz IV and poverty pensions. Now where politics rejoices that life goes forward with economic growth, we feel: we are in the middle of a climate catastrophe threatening the future of the earth.

CONCLUSION

The 1982 West German turn and the 1989 Eastern European turn had one thing in common: they were turns to a neoliberal predatory capitalism as with the former German chancellor Helmut Schmidt. They were turns in the wrong direction. They did not bring us forward but threw us back and led us into a cul-de-sac. Efficiency thinking has gained the upper hand in politics, society and the churches. Society leads a dance around the golden calf. As Christians we know this. This dance is underway again.

The future of society is precedent, not the solution of economic problems. The crucial question is not: what is good for investment conditions of businesses? The central question is: how do we want to live? What does it mean to live well and justly? Businesses and the economy generally must be helpful to life, public interest and the life together of people in society. Thus answering the question about just cooperative life and what the economy can contribute to that is primary. We want to live so a rich society like Germany produces unparalleled prosperity that excludes no one.

We want to make the social wealth useful for the sense of well-being of everyone in Germany and worldwide. Let us cooperate in this project. We are co-workers for God’s shalom and together champion justice, peace and preservation of society that God entrusts to us. We are supported by the certainty: another world is necessary and possible.