The dreadful reality is the `best of all possible worlds' as in the world of Voltaire's Candide. Serious financial crises, increasing poverty and high unemployment cannot shake a modern Candide.. The ideological legitimacy of neoliberalism is over, Walden Bello said.
MARKETS AND POWER: THE INTERNATIONAL POLITICAL ECONOMY
Critique of International Political Economy – Polemics and Perspectives on Overcoming Paralysis through Globalization Criticism. A Summary of Two Lectures on International Political Economy from 2004
By Elmar Altvater
[Elmar Altvater is an emeritus professor of political economy at the Free University of Berlin. His article published on the Attac Austria web site is translated from the German on the World Wide Web,
http://www.attac.at/781.98.html.]
Why is criticism of the international political economy vital? Why can’t one be satisfied that this subject is included in the political science curriculum? The answer could be simply: “It’s the globalization stupid.” But let us not make ourselves stupid. Sovereign nation states formed since the origin of the capitalist world system in the “long 16th century.” Nicoli Machiavelli, Francois Bodin and Hugo Grotius described their characteristics. These characteristics are essentially unchanged up to today and can be summarized in one term “sovereignty.”
At the same time economic relations internationalized. A globalized world system arose with globalized markets and international relations of nation states. Markets and power defined the development. Politics and the economy separated with the birth of modern capitalism and form a contradictory unity. In politics, borders are set and regulated. Nation-state sovereignty consists above all over areas and citizens. In the economy, on the other hand, borders are ignored, seen as obstacles of boundless exploitation pressure and increasingly dismantled. Commodity streams and capital flows are liberalized. The political insignia of sovereignty are confronted with the practical necessities of the market. Market and power, state and economy and economy and politics are the opposite sides of a coin even if this coin is as vast as the globe. The classical authors knew this. Therefore they pursued political economy. In his “Critique of Political Economy,” Karl Marx never questioned this basic fact of the capitalist mode of production. The economy is political because interests and their organizations face the “mode of production base don value.”
A seemingly apolitical economy based on “methodological individualism” arose later with neoclassicism. “Economics,” the contrasting program to the political economy, is dominant in today’s academic world. The economy that is neither political nor international is presented as the certainty of the modern age. Economists regard themselves as high priests interpreting their fetish, economic events. The markets demand, act and react. “Analysts” and economists are certain of having a lease on truth in interpreting market signals. Political economy, international political economy and its criticism are outside the sphere of influence of economists. Political economy and international political economy are not their disciplines.
I must tell you, I am an educated economist with two degrees and hope to say something enlightening on my subject.
The greatest economic feeblemindedness, the demand for extending working hours as in the 19th century, is reverently taken up by some media and spread as an absolute truth if only spoken from a competent high priest’s mouth. This happens as though no technical, economic and social progress has occurred in the past 150 years!
“Truth makes a country rich,” we read in an 1821 treatise. A country is rich when 4 hours are worked instead of 12 hours. “Wealth is measured in disposable time outside the time used in production, not in surplus working hours” (Marx, Grundrisse). The “creation of increasing disposable time” is the condition of emancipation. “The real economy… consists in saving working hours…” The economist Sinn from the IFO Institute, Zimmermann from the DIW and many others who opportunistically play the same tune are not afraid of increasing the “homemade minority status.” Immanuel Kant urged overcoming this “minority status” through enlightenment. The extent of anti-enlightened stupidity is certainly startling. However the nonsense of the high priests could be understood as an urgent challenge to radicalize the criticism of this economy in which the length of working hours is inverted into the measure of wealth (cf. Grundrisse).
Thus markets and power can be analyzed in their contradictory relationship. For more than 250 years, power had to be limited to benefit the market since competition drives inventiveness, intensifies the international division of labor and improves productive resources.
In this way the “wealth of nations” becomes greater everywhere in the world, according to the founder of liberal political economy Adam Smith. David Ricardo, the other great classical author, showed that this thesis is also true when one country has absolute competitive advantages in all regards in the international competition and as a result does not depend on exchange. Withdrawing production factors from comparatively unfavorable branches and steering them into comparatively more favorable branches can be reasonable because one can buy more goods with the surplus product in another country than one could produce oneself. The laws of the liberal economy are actually universal; they are valid for all situations.
What was unquestioned at the beginning of capitalist industrialization almost 230 years ago is also an iron dogma in times of globalization. On its homepage, the World Trade organization (WTO) describes the old liberal credo as “the single most powerful insight in economics.” Thus the neoliberal economic dogmas adjusted to the capitalist modern age guide politics today, not only the dogmas of the WTO.
Managers of transnational corporations who had a rendezvous at the World Economic Forum in Davos and at the Global Compact meeting in New York on Kofi Annan’s invitation and neoclassic-neoliberal economists at universities from Buenos Aires to Berlin parrot these dogmas. In standardized thinking, there is no room for alternatives, theoretical criticism and practical change. Paradise and the expulsion from paradise are excised in liberal thinking because this lies far back in an undated past. A social utopia, the paradise of the future envisioned by Carlos Fuentes, is alien to standardized liberal thinking and more than suspect. They want to know nothing of a land of milk and honey; the “praise of laziness” outrages them. Technical utopias also upset them. No reproach is more crushing than being a utopian. What alternative to the status quo does not contain utopian elements? Can alternative designs of society be developed without concrete utopias? Ernst Bloch would answer No.
A willing, unenlightened public can accept the most brutal, malicious proposals where the need for enlightenment dies off, criticism becomes a foreign word and utopian thinking is scorned. Karl Polanyi wrote about the market economy of the 18th century that was “embedded” in society and affected labor and nature like “Satan’s mill.” Society, moral standards, human needs and natural vulnerability have no place amid the dominance of cost-calculation and shareholder value. The necessary sensorium is thoroughly driven out of economists.
The dreadful reality is the “best of all possible worlds” as in the world of Voltaire’s Candide. Serious financial crises, increasing poverty and high unemployment cannot shake a modern Candide any more than the globalized war waged with the overwhelming military machine of the superpower and its assistants. The fact that all human rights limits are ignored does not worry the modern Candide. Alternatives are not envisioned or realized. Paradise is something for the past; a utopia is worthless for the future. Because this hopelessness and lack of alternatives and utopias characterize neoliberal thinking, the deep sign of my friend Rudolf Hickel that the crisis must intensify even more to move neoliberals to rethinking and reasonable self-doubt is understandable but hardly helpful (cf. Freitag 7/9/2004).
II.
Is the whole world a deregulated and liberalized market place on which the strongest actors prevail? In the conflicts at Cancun in September 2003, the developing countries succeeded for the first time since the 1960s (when they formed the Group of 77) in acting as a block against the European Union (EU) and the US. The EU and the US preach the water of free trade and approve the wine of protectionism, above all in agriculture, for themselves (Bertold Brecht said those who feast sumptuously today tell the impoverished to wait for a bright tomorrow).
This is actually not new. The paleo-liberal Adam Smith was an ardent protectionist when England’s commercial interests were involved. He defended the navigation acts and justified military actions against “barbarian people” when necessary to protect the “commerce” of British merchants.
The philosophical paradoxes of the liberal message have persisted since its hour of birth. However they were no longer accepted as self-evident at the beginning of the new century. The “ideological legitimacy” of neoliberalism is over, Walden Bello said. The market appears as a nasty economic place with fighting over prices, sales markets, access possibilities, raw materials and the best and cheapest workers. This fighting is in no way always among honorable fair play merchants. The “investors” transfigured by the media into “white knights” fight with a vengeance. After the deregulation of markets in the past 30 years, this struggle is disorderly and merciless against the weak and losers. ‘The winner takes all” is in effect in the “survival of the fittest.” The most powerful in the market competition are the mammoth transnational corporations whose profits surpass the gross domestic product of medium-sized states. The large funds and banks move enormous streams of capital and can plunge whole regions of the world like Asia or Latin America into financial crises. The international organizations actively join in this power play.
Those poor countries without the power to resist the globalized world economy in the “cannibalist order” should open themselves to the global market place and be devoured. Like a hundred years ago, the “plundering” of the South is a theme, particularly of political economists from southern countries (e.g. Yash Tandon). Whoever speaks of free markets and their kindnesses should not forget power, coercion and violence, cheating of the weaker, corruption in the relations between the private and public sectors and “white collar criminality.”
The liberal message spread very successfully by the neoliberals of the Freiburg school that the market functions best for the wealth of nations when power is limited to providing a competitive order passes by capitalist realities in a grotesque way.
Competitive markets with equally strong actors holding to the rules of the game only exist in the theoretical model. As a result, the optimum prosperity expected from the working of the market mechanism is only found in the theoretical model. The model world is like a protective armor blocking critical perception of capitalist reality. Attempted criticism appears as unnecessary and erroneous. Whoever preaches from the high pedestal of scholarly expertise as a so-called “analyst” against encrusted labor markets, excessively high taxes and social fees, too much state and too little market and tells off countries stricken with financial distress in a global financial crisis can be sure of the applause of the media and the powerful.
The supposition of Friedrich August von Hayek, the winner of the Nobel Prize for economics, that the market is a power-free exchange system without an institutional substructure has nothing to do with the reality of the modern world market. The power-crazed gurus of stock markets and financial institutions can only giggle about the model. In truth, the capitalist dynamic on free markets depends on this institutional substructure.
That education and water are sold as commodities, that pharmaceutical companies acquire patented property rights in indigenous knowledge, that trees are thrown on the market as (building) timber and exotic fish have collector’s prices when they are sold, that public security is supplied by private security firms who can even hire private mercenary troops, that a cultural heritage of humanity like the National Museum in Baghdad or ancient Mesopotamia’s discoveries can be ransacked by private antiquarians with the help of the army of the “only superpower” – all this is not natural but the consequence of a powerful, extensive and politically-supported privatization of public goods, of an unending “commercialization” in the long history of capitalism.
The story of creation of the world of goods did not end after the sixth day. The god of capitalist commercialization does not know either a pause or a seventh day of rest. This god will never say it is satisfied with its work or that the work succeeded. No, this work must be restlessly continued on a higher level (and with longer working hours).
Commercialization includes the penetration and opening of the last self-contained economies in the globalized world economy, the conquest of the universe for satellite-supported commercial telecommunication and politically promoted advances in the nano-world of genes. Commercialization also involves the far-reaching privatization of public enterprises, institutions and assets in which mammoth businesses are purchased and privatizations occur in former command socialist states or those countries of the third world subjected to IMF-structural adjustment programs. Property rights of private parties are assigned and secured through state authority: by patent rights, real estate registrations and criminal law on property offenses. The market cannot exist without the political power that allocates property rights and effectively keeps non-owners from the property of others.
It is no wonder that vehement conflicts over property rights arise within the global service agreement GATS and over intellectual property rights in computer software, music or genetic code. These conflicts engender an international regime for resolving disputes.
Politics moves in the “towrope of the financial markets,” as a former manager of Deutsche bank said self-confidently. The economy has priority. In the times of globalization, this priority is strikingly true for the financial markets.
The speculator George Soros formulated this rather casually during the 2002 Brazilian presidential election campaign. The candidate of the left, Ignacio Lula de Silva, would win easily if he doesn’t attack the financial markets. “Only the Americans vote in modern global capitalism, not he Brazilians.” (TAZ, 6/20/2002). Thus the voting citizens lose democratic rights because “the financial markets” or the actors on these markets, the large banks, funds and rating agencies, self-assuredly judge state actions. As George Soros rightly noted with his smug remark, the politics of the Lula government demonstrates that Brazil’s financial obligation, a primary surplus in the state budget of 4%, will be met even if the social promises of eliminating hunger and guaranteeing three meals a day to every Brazilian remain unfulfilled.
III.
In the abstract realm of money and finances, the markets actually exercise a kind of absolute rule. These markets do not need democratic legitimation or control by the sovereign, the people. The actors on the internationalized financial markets also have no responsibility toward those affected by their actions, the people who – according to the data of the World Bank – lost between 20 and 60 percent of their annual income in the financial crises of the 1990s.
Many people perished in the whirlpool of the financial instabilities through which whole countries were dragged “in a towrope.” The managers of large banks, pension- or investment funds and transnational corporations or analysts of rating agencies only bear responsibility to the financial backers who expect the greatest possible increase of assets. That is the democracy of the market participants. Every dollar and every Euro counts. Some have massive funds while most have very little. We cannot speak seriously of political democracy on the global plane if according to the data of the United Nations Development Program 358 rich persons earn as much as 2.3 billion poor. The millennium goals of reducing poverty in half fall by the wayside. The World Bank must admit that the number of people living in poverty is greater, not smaller, in some regions of the world.
The modern social states of developed industrial countries and improved education have diminished somewhat the pressure of the free market. However protection from unlawful termination, favored nation privileges, unemployment benefits and limitations on reasonability are “reformed” in Germany – with “Hartz I to IV” and Agenda 2010 – so pressure increases again. It is good for the competitiveness of businesses “in the location Germany” if the wage costs for businesses are lowered this way. The triumphant cry of the media about he lengthened working hours at Siemens to 40 weekly hours (with wage reduction of more than 15%) to avert the shift of jobs rings in our e3ars. For workers, lowering costs is synonymous with decreased income and living standards. Labor income and working conditions fall under a downward pressure in the global competition. Thus in Germany, a model country of so-called “Rhine capitalism,” precarious working conditions are created in which social security, an achievement of the social state reforms of past centuries, is largely absent. So-called informal work spreads in all regions of the world, especially in the global South. This is work without a formal labor contract, unprotected and with inadequate social guarantees. Organized representation of interests is usually lacking. In developing countries, between 50% and 90% of the workers are informally employed. In industrial countries, the share is lower but the tendency is rising. The International labor organization admits that a billion persons are either jobless or precariously employed. The Hartz reforms show how the economy and politics cooperate to lower labor costs in the global competition on commodity markets and increase profits or shareholder value in the global competition of financial positions and how the background media music is made.
IV.
Paradoxically the freer markets have weaker corrective forces.
The less regulation, the greater the possibility of private power extortion and bribery, for embezzlement and fraud and for satisfying the insatiable greed that seizes many managers on the top floors. According to the data of the International Monetary Fund, up to $1.5 trillion of polluted, informal money is laundered annually. This is almost 5 percent of the global social product. The dirty money originates from corruption, drug- and human trade, weapon smuggling, investment fraud and other offenses and crimes. Tax shelters like Liechtenstein, Luxemburg, Switzerland and other so-called offshore centers act as money-laundering facilities. These “special jurisdictions” attract the rich of all wealthy countries since public controls are largely removed. The rule of law is withdrawn to give private persons all the possibilities for parking criminally gained money, evaded taxes or capital illegally withdrawn from many countries in state-free areas and channeling the funds back into the global financial markets after thorough money laundering to do booming business in troubled waters. The measures against money laundering were first intensified after September 11, 2001. International terrorism obviously used the laundering facilities for its purposes. The offshore centers with their special legislation – sometimes states like Russia or Israel or the US state of Delaware - could be identified as political-economic entities of reduced rule of law, as states “captured” by the actors of the global financial markets (“state capture”).
The right of the stronger is in force in the control over mineral and energetic resources, the fuel of modern capitalist industrial society. Power and market, economy and politics cooperate here. The earth’s materials must be extracted from the earth’s crust. This can only happen when the territory is sovereignly dominated and the sovereign makes access possible. On top of that, raw materials, above all crude oil, have to be transported with supertankers and pipelines from the sources to the consumers in the industrial countries
Guaranteeing “energy security, that is the oil supply of consumer countries at reasonable prices, is not only a question of establishing property rights over the land. All interesting raw material territories in the modern world belong to nation states (one exception has long been Antarctica). Thus the resp4ective state must cooperate in extracting oil and delivering the black substance to industrial countries – as Adam Smith explained 230 years ago. As a result, the commercialization of raw materials is usually connected with acts of violence. At the beginning of the 21st century, there are similarities with the “old” imperialism of the late 19th and early 20th century. The violent nature of energy security policy is not an exception given the foreseeable finiteness of the supply (extraction has exceeded the peak in many regions of the world). The champions of economic globalization ally with state power, above all with the military elites, in a globalization- and militarization complex for which the Halliburton connection could be an example. The policy of neoliberal globalization is organized in a binary way by dividing the world into the good threatened by “rogue states” or an “axis of evil,” into the “willing” and “unwilling” or “new” and “old” Europeans.
Market and power enter into a symbiosis within the neoliberal project of globalization. The contradictions of market and power since 9/11/2001 are considerable and crass. On one hand, the US holds more than 600 persons in Guantanamo who were denied all legal status – as persons, citizens, prisoners of war and prisoners – until the recent decision of the Supreme Court. The Guantanamo persons are not considered fair game since they are hermetically locked up. However American insurance companies are simultaneously suing bin Ladin and others for hundreds of billions in compensation for the attacks of September 11, 2001. The claim of the corporations must also be directed against the Guantanamo persons who – what a miracle – rise again as economic subjects liable for property offenses after being buried as legal subjects in their orange prisoner uniforms.
V.
Given the world problems and the difficulties in grasping them, the epistemological question is raised about the appropriateness of socioeconomic categories and the functions of theory. The abundance of theoretical approaches in international political economy could show the riches of the discipline.
Only a rudimentary description of positions in the theoretical field of international political economy is possible in this summary of two lectures.
A criticism of (international) political economy can only be eclectic today. The categories of criticism are derived from different theories and connected systematically. Criticism means grappling with theories. Criticism is firstly immanent criticism examining immanent consistency and secondly material criticism testing the relation of theories to the prevailing conditions. Thirdly, criticism flows into the development of a theory with which the present can be understood as history and perspectives worked out for organizing the future and for practical purposes. Marxist theory is very well prepared for this task. That universities in and beyond Germany have cleared away the last remnants of critical Marxism is truly unfortunate.
The category of commercialization is one of the salient points of the theoretical field. Commercialization includes the tendencies of globalization as a process condensing space and time. The historical forms of commercialization include the distinction of developmental phases of the capitalist world systems from colonialist spatial expansion to the “old” imperialism, multilateral globalization and a US unilateralism that is also termed the new imperialism. Commercialization refers to the categories of value, commodities, money, the fetishism of the commodity world, the labor- and utilization-process and social exploitation. Here we can find the theoretical approaches and historical analyses of Karl Polanyi and Ferdinand Braudel. The category of “embedding” in commodity- and money-fetishism helps reveal the historical development to the market economy.
Since its origin, the historical capitalist world system has been unstable and passes through crises. An analytical instrument for understanding crises is necessary to apprehend the economic tendencies of accumulation. Different crises are manifest: economic crises, structural crises, hegemonial crises and civilization crises with different ranges and depths in view of the social changes. Small and large crises are different. These crises include crises in social organization and the structural crisis that shakes the forms of social reproduction and calls into question social and political institutions and values.
The grave financial crises of the last decades showed the urgency of developing a crisis theory that takes account of globalization. Globalization can be understood as a radical process of social transformations. Traditional forms never seamlessly transform themselves into new forms. Rather “interim forms” of “informalization” arise that embrace labor, money and politics. These forms become fortified and last a long time so that international political economy cannot avoid integrating the tendencies of informalization of labor, money and politics in the analytical horizon.
Despite the crisis phenomena and the essential instability of the market- and monetary system, the conditions of political power and rule in the global system are not endangered. Economic “mechanisms” of globalization provoke instabilities and crises while political and social buffers prevent economic crises from leading to erosion of rule. Crises are also phases of purification from contradictions, the system’s “fountains of youth” and processes of political and economic stabilization. Antonio Gramsci’s term hegemony helps explain this fact. Power and consensus collaborate and make possible the formation of an “historical block” of power encompassing strata and classes.
The “neo-Gramscian” international political economy from Robert Cox and Stephen Gill to Kees van der Pijl has worked out a differentiated analytical instrument to illumine complex political-economic systems of “governance.”
All human actions, economic processes and political decisions take place in the medium of nature. For most approaches of international political economy, how all action is bound to nature is self-evident. Nevertheless an analytical instrument appropriate to the problematic is vital in view of the global environmental crisis. The thermodynamic economy is helpful here if its categories are inclusive with regard to the Marxian value theory and the theory of embedding, crises and hegemony. Outfitted with the thermodynamic economy, abstracting from space and time is not possible though abstracting often happens in the socioeconomic model world. The irreversibilities and increased entropies of all material- and energy transformation refer to the direction of the age and repudiate theories that ignore what negates the principle of sustainability.
Thus the salient theoretical points for an international political economy can be identified – in collective effort overarching the disciplines. The central categories in a complex of theories are: commercialization, crises, embedding, hegemony, discourse, entropy and sustainability. International political economy can only be conceived and redeveloped as a unity of economic, social, political and ecological theory.
VI.
What does this mean for political practice? The development of alternatives to the neoliberal order is uppermost, not power, if we begin with the sympathetic conclusion of John Holloway. However even if political power remains outside, the market, competition and the capitalist principle of profit maximization are involved as Samir Amin explains:
“In truth, the logic of profit maximization is hidden in the competition of the market.”
Profit maximization in the first place is not the result of the spontaneous effects of the market but of the control and use of power, above all in the production process connected to exchange on the market.
Power is never unlimited although the striving for boundlessness is inscribed in power. With Antonio Gramsci, we could argue the economy and its principles, the market and economic power are supplemented by the power of the state and by effective mechanisms for producing consensus in civil society. These three elements together secure the hegemony of the ruling classes… A strategy of realizing another possible world can only be successful when the social actors “dance in three places”: in the alternative economy, movements of civil society and movements aiming at power in the state and society…
The lack of alternatives of the world of Candide is justifiably called into question. The chaos of an “exclusionary” globalization can be recognized at the points of fracture of the liberal order. Movements that start from the conviction that “another world is possible” also arise here. The utopia is possible, Mr. Neighbor.
Despite neoliberalism, “globalization critics” start from the firm belief that history did not end with the globalization of the market and formal democracy but is still made by people guided by reason and not moved by excuses in a homemade minority status. Counter-movements against the excesses of globalization appear worldwide. What brings together ATTAC and Via Campesina, the movement of Brazil’s landless and women’s groups from South Africa or India? Speaking somewhat simplistically, the search for economic and social-political alternatives to present globalization, the collective effort to come out of the “homemade minority status,” continue the tradition of the enlightenment even in times of globalization. The time period from the past to the present can be analyzed historically-empirically to understand the “present as history” (Paul M. Sweezy, American Marxist and editor of “Monthly Review”). However we form the time period from the present to the future. To that end, we need utopias and – on a lower plane – normative guidelines. Many proposals and demands of globalization critics hardly go beyond capitalism in a utopian way. Global competition should be re-regulated – with social- and environmental standards in world trade, rules for the financial markets that prevent their speculative excesses and lower the real interests that were extremely high for decades to a reasonable level to avoid favoring the financial sector in the future over the real economy and the speculation of a few financial magnates over the jobs of millions of persons.
All these and many other measures point to a “de-globalization” in the context of the World Social Forum or a “solidarian economy” already tested practically beyond the neoliberal order. Canceling globalization would be a negative utopia. On the other hand, globalization on a human scale would be a concrete utopia. The social distortions in the world, the increasing precarious working conditions for more and more people and the global environmental crisis are signs that the globalized economy is steering into a cul-de-sac at high speed against the wind, guided by narrow-minded managers focused on shareholder value, growth and maintaining power. The drama of the Tower of Babel is repeated.
Technical problems with the inertia of the giant complex were not alone responsible for the failure. The Babylonian confusion of language increased the costs of labor organization and other transaction costs in building the tower so the early globalization project could not be ended. These costs have been largely deregulated in the hubris of globalization. The large nation states and the mammoth economic actors exercise power in an unregulated and therefore undemocratic way for a few powerful ones. “Globalization devours its children.”
This should be prevented through the global diversity of movements and actions and through an intensified great debate in which the emancipatory themes of critical political economy raise people with the means of the enlightenment from their “homemade minority status.” The lectures this semester on political economy and international political economy served this goal, I hope. The university is a place of reflection, theoretical work and effort with the goal of profound insight. Does this involve changing practice? Yes, we can say with Bertold Brecht: “Who can stop one with self-understanding?”
DEMOCRACY OR MARKET: ELMAR ALTVATER AND STEFAN FUCHS ON THE END OF POLITICS (The following paragraphs from a radio broadcast are translated from the German on the World Wide Web, http://www.dradio.de/dlf/sendungen/kultursonntag/393706/)
From the first, democracy was the basis of the project of the modern age oriented to the future. Progress was only conceivable when people succeeded in taking their affairs in their hands and balancing social interests.
“Capitalism will not collapse through an `endogenous’ decline. Only an outward push of extreme intensity together with a credible alternative can bring about its collapse..” In his new book, Elmar Altvater understands this word of the great French historian Ferdinand Braudel as a research task and challenge in four steps. Firstly, the development dynamic of the capitalist mode of production and appropriation in history is outlined. The transformation of “geo-economic” globalization in a new “geo-political” imperialism and the causes and consequences of a new historical alliance of market radical neoliberalism and neoconservatism relying on military power should also be emphasized. Then the “outward impulses of extreme intensity” can be identified. Since capitalist growth is essentially driven by fossil and nuclear energy, its foreseeable limitation and the disastrous consequences of emissions for the nature of planet earth are impulses that could put an end to capitalism as we know it. Inner contradictions are manifest in the crises of the financial markets. The global financial markets are not only very unstable. Innovative funds with new financial instruments speculate on these markets to gain extreme, absurdly high profits for owners of financial assets to the burden of broad masses of the population.
Given these outward and inward limits of capitalism (as we know it), an intellectual and political-practical search for “credible alternatives” growing in the interior of society is vital. These alternatives exist: the beginnings of practicing solidarity and sustainability everywhere in the world, particularly in the Latin American countries that took a heavy toll from the financial crises of the past decade. The author shows that a solidarian economy can only function with renewable energy. Conversely renewable energy can only be broadly applied when the economy is organized in a solidarian way. Solidarity and fairness require a new kind of political regulation on local, national and global planes.
Critique of International Political Economy – Polemics and Perspectives on Overcoming Paralysis through Globalization Criticism. A Summary of Two Lectures on International Political Economy from 2004
By Elmar Altvater
[Elmar Altvater is an emeritus professor of political economy at the Free University of Berlin. His article published on the Attac Austria web site is translated from the German on the World Wide Web,
http://www.attac.at/781.98.html.] Why is criticism of the international political economy vital? Why can’t one be satisfied that this subject is included in the political science curriculum? The answer could be simply: “It’s the globalization stupid.” But let us not make ourselves stupid. Sovereign nation states formed since the origin of the capitalist world system in the “long 16th century.” Nicoli Machiavelli, Francois Bodin and Hugo Grotius described their characteristics. These characteristics are essentially unchanged up to today and can be summarized in one term “sovereignty.”
At the same time economic relations internationalized. A globalized world system arose with globalized markets and international relations of nation states. Markets and power defined the development. Politics and the economy separated with the birth of modern capitalism and form a contradictory unity. In politics, borders are set and regulated. Nation-state sovereignty consists above all over areas and citizens. In the economy, on the other hand, borders are ignored, seen as obstacles of boundless exploitation pressure and increasingly dismantled. Commodity streams and capital flows are liberalized. The political insignia of sovereignty are confronted with the practical necessities of the market. Market and power, state and economy and economy and politics are the opposite sides of a coin even if this coin is as vast as the globe. The classical authors knew this. Therefore they pursued political economy. In his “Critique of Political Economy,” Karl Marx never questioned this basic fact of the capitalist mode of production. The economy is political because interests and their organizations face the “mode of production base don value.”
A seemingly apolitical economy based on “methodological individualism” arose later with neoclassicism. “Economics,” the contrasting program to the political economy, is dominant in today’s academic world. The economy that is neither political nor international is presented as the certainty of the modern age. Economists regard themselves as high priests interpreting their fetish, economic events. The markets demand, act and react. “Analysts” and economists are certain of having a lease on truth in interpreting market signals. Political economy, international political economy and its criticism are outside the sphere of influence of economists. Political economy and international political economy are not their disciplines.
I must tell you, I am an educated economist with two degrees and hope to say something enlightening on my subject.
The greatest economic feeblemindedness, the demand for extending working hours as in the 19th century, is reverently taken up by some media and spread as an absolute truth if only spoken from a competent high priest’s mouth. This happens as though no technical, economic and social progress has occurred in the past 150 years!
“Truth makes a country rich,” we read in an 1821 treatise. A country is rich when 4 hours are worked instead of 12 hours. “Wealth is measured in disposable time outside the time used in production, not in surplus working hours” (Marx, Grundrisse). The “creation of increasing disposable time” is the condition of emancipation. “The real economy… consists in saving working hours…” The economist Sinn from the IFO Institute, Zimmermann from the DIW and many others who opportunistically play the same tune are not afraid of increasing the “homemade minority status.” Immanuel Kant urged overcoming this “minority status” through enlightenment. The extent of anti-enlightened stupidity is certainly startling. However the nonsense of the high priests could be understood as an urgent challenge to radicalize the criticism of this economy in which the length of working hours is inverted into the measure of wealth (cf. Grundrisse).
Thus markets and power can be analyzed in their contradictory relationship. For more than 250 years, power had to be limited to benefit the market since competition drives inventiveness, intensifies the international division of labor and improves productive resources.
In this way the “wealth of nations” becomes greater everywhere in the world, according to the founder of liberal political economy Adam Smith. David Ricardo, the other great classical author, showed that this thesis is also true when one country has absolute competitive advantages in all regards in the international competition and as a result does not depend on exchange. Withdrawing production factors from comparatively unfavorable branches and steering them into comparatively more favorable branches can be reasonable because one can buy more goods with the surplus product in another country than one could produce oneself. The laws of the liberal economy are actually universal; they are valid for all situations.
What was unquestioned at the beginning of capitalist industrialization almost 230 years ago is also an iron dogma in times of globalization. On its homepage, the World Trade organization (WTO) describes the old liberal credo as “the single most powerful insight in economics.” Thus the neoliberal economic dogmas adjusted to the capitalist modern age guide politics today, not only the dogmas of the WTO.
Managers of transnational corporations who had a rendezvous at the World Economic Forum in Davos and at the Global Compact meeting in New York on Kofi Annan’s invitation and neoclassic-neoliberal economists at universities from Buenos Aires to Berlin parrot these dogmas. In standardized thinking, there is no room for alternatives, theoretical criticism and practical change. Paradise and the expulsion from paradise are excised in liberal thinking because this lies far back in an undated past. A social utopia, the paradise of the future envisioned by Carlos Fuentes, is alien to standardized liberal thinking and more than suspect. They want to know nothing of a land of milk and honey; the “praise of laziness” outrages them. Technical utopias also upset them. No reproach is more crushing than being a utopian. What alternative to the status quo does not contain utopian elements? Can alternative designs of society be developed without concrete utopias? Ernst Bloch would answer No.
A willing, unenlightened public can accept the most brutal, malicious proposals where the need for enlightenment dies off, criticism becomes a foreign word and utopian thinking is scorned. Karl Polanyi wrote about the market economy of the 18th century that was “embedded” in society and affected labor and nature like “Satan’s mill.” Society, moral standards, human needs and natural vulnerability have no place amid the dominance of cost-calculation and shareholder value. The necessary sensorium is thoroughly driven out of economists.
The dreadful reality is the “best of all possible worlds” as in the world of Voltaire’s Candide. Serious financial crises, increasing poverty and high unemployment cannot shake a modern Candide any more than the globalized war waged with the overwhelming military machine of the superpower and its assistants. The fact that all human rights limits are ignored does not worry the modern Candide. Alternatives are not envisioned or realized. Paradise is something for the past; a utopia is worthless for the future. Because this hopelessness and lack of alternatives and utopias characterize neoliberal thinking, the deep sign of my friend Rudolf Hickel that the crisis must intensify even more to move neoliberals to rethinking and reasonable self-doubt is understandable but hardly helpful (cf. Freitag 7/9/2004).
II.
Is the whole world a deregulated and liberalized market place on which the strongest actors prevail? In the conflicts at Cancun in September 2003, the developing countries succeeded for the first time since the 1960s (when they formed the Group of 77) in acting as a block against the European Union (EU) and the US. The EU and the US preach the water of free trade and approve the wine of protectionism, above all in agriculture, for themselves (Bertold Brecht said those who feast sumptuously today tell the impoverished to wait for a bright tomorrow).
This is actually not new. The paleo-liberal Adam Smith was an ardent protectionist when England’s commercial interests were involved. He defended the navigation acts and justified military actions against “barbarian people” when necessary to protect the “commerce” of British merchants.
The philosophical paradoxes of the liberal message have persisted since its hour of birth. However they were no longer accepted as self-evident at the beginning of the new century. The “ideological legitimacy” of neoliberalism is over, Walden Bello said. The market appears as a nasty economic place with fighting over prices, sales markets, access possibilities, raw materials and the best and cheapest workers. This fighting is in no way always among honorable fair play merchants. The “investors” transfigured by the media into “white knights” fight with a vengeance. After the deregulation of markets in the past 30 years, this struggle is disorderly and merciless against the weak and losers. ‘The winner takes all” is in effect in the “survival of the fittest.” The most powerful in the market competition are the mammoth transnational corporations whose profits surpass the gross domestic product of medium-sized states. The large funds and banks move enormous streams of capital and can plunge whole regions of the world like Asia or Latin America into financial crises. The international organizations actively join in this power play.
Those poor countries without the power to resist the globalized world economy in the “cannibalist order” should open themselves to the global market place and be devoured. Like a hundred years ago, the “plundering” of the South is a theme, particularly of political economists from southern countries (e.g. Yash Tandon). Whoever speaks of free markets and their kindnesses should not forget power, coercion and violence, cheating of the weaker, corruption in the relations between the private and public sectors and “white collar criminality.”
The liberal message spread very successfully by the neoliberals of the Freiburg school that the market functions best for the wealth of nations when power is limited to providing a competitive order passes by capitalist realities in a grotesque way.
Competitive markets with equally strong actors holding to the rules of the game only exist in the theoretical model. As a result, the optimum prosperity expected from the working of the market mechanism is only found in the theoretical model. The model world is like a protective armor blocking critical perception of capitalist reality. Attempted criticism appears as unnecessary and erroneous. Whoever preaches from the high pedestal of scholarly expertise as a so-called “analyst” against encrusted labor markets, excessively high taxes and social fees, too much state and too little market and tells off countries stricken with financial distress in a global financial crisis can be sure of the applause of the media and the powerful.
The supposition of Friedrich August von Hayek, the winner of the Nobel Prize for economics, that the market is a power-free exchange system without an institutional substructure has nothing to do with the reality of the modern world market. The power-crazed gurus of stock markets and financial institutions can only giggle about the model. In truth, the capitalist dynamic on free markets depends on this institutional substructure.
That education and water are sold as commodities, that pharmaceutical companies acquire patented property rights in indigenous knowledge, that trees are thrown on the market as (building) timber and exotic fish have collector’s prices when they are sold, that public security is supplied by private security firms who can even hire private mercenary troops, that a cultural heritage of humanity like the National Museum in Baghdad or ancient Mesopotamia’s discoveries can be ransacked by private antiquarians with the help of the army of the “only superpower” – all this is not natural but the consequence of a powerful, extensive and politically-supported privatization of public goods, of an unending “commercialization” in the long history of capitalism.
The story of creation of the world of goods did not end after the sixth day. The god of capitalist commercialization does not know either a pause or a seventh day of rest. This god will never say it is satisfied with its work or that the work succeeded. No, this work must be restlessly continued on a higher level (and with longer working hours).
Commercialization includes the penetration and opening of the last self-contained economies in the globalized world economy, the conquest of the universe for satellite-supported commercial telecommunication and politically promoted advances in the nano-world of genes. Commercialization also involves the far-reaching privatization of public enterprises, institutions and assets in which mammoth businesses are purchased and privatizations occur in former command socialist states or those countries of the third world subjected to IMF-structural adjustment programs. Property rights of private parties are assigned and secured through state authority: by patent rights, real estate registrations and criminal law on property offenses. The market cannot exist without the political power that allocates property rights and effectively keeps non-owners from the property of others.
It is no wonder that vehement conflicts over property rights arise within the global service agreement GATS and over intellectual property rights in computer software, music or genetic code. These conflicts engender an international regime for resolving disputes.
Politics moves in the “towrope of the financial markets,” as a former manager of Deutsche bank said self-confidently. The economy has priority. In the times of globalization, this priority is strikingly true for the financial markets.
The speculator George Soros formulated this rather casually during the 2002 Brazilian presidential election campaign. The candidate of the left, Ignacio Lula de Silva, would win easily if he doesn’t attack the financial markets. “Only the Americans vote in modern global capitalism, not he Brazilians.” (TAZ, 6/20/2002). Thus the voting citizens lose democratic rights because “the financial markets” or the actors on these markets, the large banks, funds and rating agencies, self-assuredly judge state actions. As George Soros rightly noted with his smug remark, the politics of the Lula government demonstrates that Brazil’s financial obligation, a primary surplus in the state budget of 4%, will be met even if the social promises of eliminating hunger and guaranteeing three meals a day to every Brazilian remain unfulfilled.
III.
In the abstract realm of money and finances, the markets actually exercise a kind of absolute rule. These markets do not need democratic legitimation or control by the sovereign, the people. The actors on the internationalized financial markets also have no responsibility toward those affected by their actions, the people who – according to the data of the World Bank – lost between 20 and 60 percent of their annual income in the financial crises of the 1990s.
Many people perished in the whirlpool of the financial instabilities through which whole countries were dragged “in a towrope.” The managers of large banks, pension- or investment funds and transnational corporations or analysts of rating agencies only bear responsibility to the financial backers who expect the greatest possible increase of assets. That is the democracy of the market participants. Every dollar and every Euro counts. Some have massive funds while most have very little. We cannot speak seriously of political democracy on the global plane if according to the data of the United Nations Development Program 358 rich persons earn as much as 2.3 billion poor. The millennium goals of reducing poverty in half fall by the wayside. The World Bank must admit that the number of people living in poverty is greater, not smaller, in some regions of the world.
The modern social states of developed industrial countries and improved education have diminished somewhat the pressure of the free market. However protection from unlawful termination, favored nation privileges, unemployment benefits and limitations on reasonability are “reformed” in Germany – with “Hartz I to IV” and Agenda 2010 – so pressure increases again. It is good for the competitiveness of businesses “in the location Germany” if the wage costs for businesses are lowered this way. The triumphant cry of the media about he lengthened working hours at Siemens to 40 weekly hours (with wage reduction of more than 15%) to avert the shift of jobs rings in our e3ars. For workers, lowering costs is synonymous with decreased income and living standards. Labor income and working conditions fall under a downward pressure in the global competition. Thus in Germany, a model country of so-called “Rhine capitalism,” precarious working conditions are created in which social security, an achievement of the social state reforms of past centuries, is largely absent. So-called informal work spreads in all regions of the world, especially in the global South. This is work without a formal labor contract, unprotected and with inadequate social guarantees. Organized representation of interests is usually lacking. In developing countries, between 50% and 90% of the workers are informally employed. In industrial countries, the share is lower but the tendency is rising. The International labor organization admits that a billion persons are either jobless or precariously employed. The Hartz reforms show how the economy and politics cooperate to lower labor costs in the global competition on commodity markets and increase profits or shareholder value in the global competition of financial positions and how the background media music is made.
IV.
Paradoxically the freer markets have weaker corrective forces.
The less regulation, the greater the possibility of private power extortion and bribery, for embezzlement and fraud and for satisfying the insatiable greed that seizes many managers on the top floors. According to the data of the International Monetary Fund, up to $1.5 trillion of polluted, informal money is laundered annually. This is almost 5 percent of the global social product. The dirty money originates from corruption, drug- and human trade, weapon smuggling, investment fraud and other offenses and crimes. Tax shelters like Liechtenstein, Luxemburg, Switzerland and other so-called offshore centers act as money-laundering facilities. These “special jurisdictions” attract the rich of all wealthy countries since public controls are largely removed. The rule of law is withdrawn to give private persons all the possibilities for parking criminally gained money, evaded taxes or capital illegally withdrawn from many countries in state-free areas and channeling the funds back into the global financial markets after thorough money laundering to do booming business in troubled waters. The measures against money laundering were first intensified after September 11, 2001. International terrorism obviously used the laundering facilities for its purposes. The offshore centers with their special legislation – sometimes states like Russia or Israel or the US state of Delaware - could be identified as political-economic entities of reduced rule of law, as states “captured” by the actors of the global financial markets (“state capture”).
The right of the stronger is in force in the control over mineral and energetic resources, the fuel of modern capitalist industrial society. Power and market, economy and politics cooperate here. The earth’s materials must be extracted from the earth’s crust. This can only happen when the territory is sovereignly dominated and the sovereign makes access possible. On top of that, raw materials, above all crude oil, have to be transported with supertankers and pipelines from the sources to the consumers in the industrial countries
Guaranteeing “energy security, that is the oil supply of consumer countries at reasonable prices, is not only a question of establishing property rights over the land. All interesting raw material territories in the modern world belong to nation states (one exception has long been Antarctica). Thus the resp4ective state must cooperate in extracting oil and delivering the black substance to industrial countries – as Adam Smith explained 230 years ago. As a result, the commercialization of raw materials is usually connected with acts of violence. At the beginning of the 21st century, there are similarities with the “old” imperialism of the late 19th and early 20th century. The violent nature of energy security policy is not an exception given the foreseeable finiteness of the supply (extraction has exceeded the peak in many regions of the world). The champions of economic globalization ally with state power, above all with the military elites, in a globalization- and militarization complex for which the Halliburton connection could be an example. The policy of neoliberal globalization is organized in a binary way by dividing the world into the good threatened by “rogue states” or an “axis of evil,” into the “willing” and “unwilling” or “new” and “old” Europeans.
Market and power enter into a symbiosis within the neoliberal project of globalization. The contradictions of market and power since 9/11/2001 are considerable and crass. On one hand, the US holds more than 600 persons in Guantanamo who were denied all legal status – as persons, citizens, prisoners of war and prisoners – until the recent decision of the Supreme Court. The Guantanamo persons are not considered fair game since they are hermetically locked up. However American insurance companies are simultaneously suing bin Ladin and others for hundreds of billions in compensation for the attacks of September 11, 2001. The claim of the corporations must also be directed against the Guantanamo persons who – what a miracle – rise again as economic subjects liable for property offenses after being buried as legal subjects in their orange prisoner uniforms.
V.
Given the world problems and the difficulties in grasping them, the epistemological question is raised about the appropriateness of socioeconomic categories and the functions of theory. The abundance of theoretical approaches in international political economy could show the riches of the discipline.
Only a rudimentary description of positions in the theoretical field of international political economy is possible in this summary of two lectures.
A criticism of (international) political economy can only be eclectic today. The categories of criticism are derived from different theories and connected systematically. Criticism means grappling with theories. Criticism is firstly immanent criticism examining immanent consistency and secondly material criticism testing the relation of theories to the prevailing conditions. Thirdly, criticism flows into the development of a theory with which the present can be understood as history and perspectives worked out for organizing the future and for practical purposes. Marxist theory is very well prepared for this task. That universities in and beyond Germany have cleared away the last remnants of critical Marxism is truly unfortunate.
The category of commercialization is one of the salient points of the theoretical field. Commercialization includes the tendencies of globalization as a process condensing space and time. The historical forms of commercialization include the distinction of developmental phases of the capitalist world systems from colonialist spatial expansion to the “old” imperialism, multilateral globalization and a US unilateralism that is also termed the new imperialism. Commercialization refers to the categories of value, commodities, money, the fetishism of the commodity world, the labor- and utilization-process and social exploitation. Here we can find the theoretical approaches and historical analyses of Karl Polanyi and Ferdinand Braudel. The category of “embedding” in commodity- and money-fetishism helps reveal the historical development to the market economy.
Since its origin, the historical capitalist world system has been unstable and passes through crises. An analytical instrument for understanding crises is necessary to apprehend the economic tendencies of accumulation. Different crises are manifest: economic crises, structural crises, hegemonial crises and civilization crises with different ranges and depths in view of the social changes. Small and large crises are different. These crises include crises in social organization and the structural crisis that shakes the forms of social reproduction and calls into question social and political institutions and values.
The grave financial crises of the last decades showed the urgency of developing a crisis theory that takes account of globalization. Globalization can be understood as a radical process of social transformations. Traditional forms never seamlessly transform themselves into new forms. Rather “interim forms” of “informalization” arise that embrace labor, money and politics. These forms become fortified and last a long time so that international political economy cannot avoid integrating the tendencies of informalization of labor, money and politics in the analytical horizon.
Despite the crisis phenomena and the essential instability of the market- and monetary system, the conditions of political power and rule in the global system are not endangered. Economic “mechanisms” of globalization provoke instabilities and crises while political and social buffers prevent economic crises from leading to erosion of rule. Crises are also phases of purification from contradictions, the system’s “fountains of youth” and processes of political and economic stabilization. Antonio Gramsci’s term hegemony helps explain this fact. Power and consensus collaborate and make possible the formation of an “historical block” of power encompassing strata and classes.
The “neo-Gramscian” international political economy from Robert Cox and Stephen Gill to Kees van der Pijl has worked out a differentiated analytical instrument to illumine complex political-economic systems of “governance.”
All human actions, economic processes and political decisions take place in the medium of nature. For most approaches of international political economy, how all action is bound to nature is self-evident. Nevertheless an analytical instrument appropriate to the problematic is vital in view of the global environmental crisis. The thermodynamic economy is helpful here if its categories are inclusive with regard to the Marxian value theory and the theory of embedding, crises and hegemony. Outfitted with the thermodynamic economy, abstracting from space and time is not possible though abstracting often happens in the socioeconomic model world. The irreversibilities and increased entropies of all material- and energy transformation refer to the direction of the age and repudiate theories that ignore what negates the principle of sustainability.
Thus the salient theoretical points for an international political economy can be identified – in collective effort overarching the disciplines. The central categories in a complex of theories are: commercialization, crises, embedding, hegemony, discourse, entropy and sustainability. International political economy can only be conceived and redeveloped as a unity of economic, social, political and ecological theory.
VI.
What does this mean for political practice? The development of alternatives to the neoliberal order is uppermost, not power, if we begin with the sympathetic conclusion of John Holloway. However even if political power remains outside, the market, competition and the capitalist principle of profit maximization are involved as Samir Amin explains:
“In truth, the logic of profit maximization is hidden in the competition of the market.”
Profit maximization in the first place is not the result of the spontaneous effects of the market but of the control and use of power, above all in the production process connected to exchange on the market.
Power is never unlimited although the striving for boundlessness is inscribed in power. With Antonio Gramsci, we could argue the economy and its principles, the market and economic power are supplemented by the power of the state and by effective mechanisms for producing consensus in civil society. These three elements together secure the hegemony of the ruling classes… A strategy of realizing another possible world can only be successful when the social actors “dance in three places”: in the alternative economy, movements of civil society and movements aiming at power in the state and society…
The lack of alternatives of the world of Candide is justifiably called into question. The chaos of an “exclusionary” globalization can be recognized at the points of fracture of the liberal order. Movements that start from the conviction that “another world is possible” also arise here. The utopia is possible, Mr. Neighbor.
Despite neoliberalism, “globalization critics” start from the firm belief that history did not end with the globalization of the market and formal democracy but is still made by people guided by reason and not moved by excuses in a homemade minority status. Counter-movements against the excesses of globalization appear worldwide. What brings together ATTAC and Via Campesina, the movement of Brazil’s landless and women’s groups from South Africa or India? Speaking somewhat simplistically, the search for economic and social-political alternatives to present globalization, the collective effort to come out of the “homemade minority status,” continue the tradition of the enlightenment even in times of globalization. The time period from the past to the present can be analyzed historically-empirically to understand the “present as history” (Paul M. Sweezy, American Marxist and editor of “Monthly Review”). However we form the time period from the present to the future. To that end, we need utopias and – on a lower plane – normative guidelines. Many proposals and demands of globalization critics hardly go beyond capitalism in a utopian way. Global competition should be re-regulated – with social- and environmental standards in world trade, rules for the financial markets that prevent their speculative excesses and lower the real interests that were extremely high for decades to a reasonable level to avoid favoring the financial sector in the future over the real economy and the speculation of a few financial magnates over the jobs of millions of persons.
All these and many other measures point to a “de-globalization” in the context of the World Social Forum or a “solidarian economy” already tested practically beyond the neoliberal order. Canceling globalization would be a negative utopia. On the other hand, globalization on a human scale would be a concrete utopia. The social distortions in the world, the increasing precarious working conditions for more and more people and the global environmental crisis are signs that the globalized economy is steering into a cul-de-sac at high speed against the wind, guided by narrow-minded managers focused on shareholder value, growth and maintaining power. The drama of the Tower of Babel is repeated.
Technical problems with the inertia of the giant complex were not alone responsible for the failure. The Babylonian confusion of language increased the costs of labor organization and other transaction costs in building the tower so the early globalization project could not be ended. These costs have been largely deregulated in the hubris of globalization. The large nation states and the mammoth economic actors exercise power in an unregulated and therefore undemocratic way for a few powerful ones. “Globalization devours its children.”
This should be prevented through the global diversity of movements and actions and through an intensified great debate in which the emancipatory themes of critical political economy raise people with the means of the enlightenment from their “homemade minority status.” The lectures this semester on political economy and international political economy served this goal, I hope. The university is a place of reflection, theoretical work and effort with the goal of profound insight. Does this involve changing practice? Yes, we can say with Bertold Brecht: “Who can stop one with self-understanding?”
DEMOCRACY OR MARKET: ELMAR ALTVATER AND STEFAN FUCHS ON THE END OF POLITICS (The following paragraphs from a radio broadcast are translated from the German on the World Wide Web,
http://www.dradio.de/dlf/sendungen/kultursonntag/393706/) From the first, democracy was the basis of the project of the modern age oriented to the future. Progress was only conceivable when people succeeded in taking their affairs in their hands and balancing social interests.
“Capitalism will not collapse through an `endogenous’ decline. Only an outward push of extreme intensity together with a credible alternative can bring about its collapse..” In his new book, Elmar Altvater understands this word of the great French historian Ferdinand Braudel as a research task and challenge in four steps. Firstly, the development dynamic of the capitalist mode of production and appropriation in history is outlined. The transformation of “geo-economic” globalization in a new “geo-political” imperialism and the causes and consequences of a new historical alliance of market radical neoliberalism and neoconservatism relying on military power should also be emphasized. Then the “outward impulses of extreme intensity” can be identified. Since capitalist growth is essentially driven by fossil and nuclear energy, its foreseeable limitation and the disastrous consequences of emissions for the nature of planet earth are impulses that could put an end to capitalism as we know it. Inner contradictions are manifest in the crises of the financial markets. The global financial markets are not only very unstable. Innovative funds with new financial instruments speculate on these markets to gain extreme, absurdly high profits for owners of financial assets to the burden of broad masses of the population.
Given these outward and inward limits of capitalism (as we know it), an intellectual and political-practical search for “credible alternatives” growing in the interior of society is vital. These alternatives exist: the beginnings of practicing solidarity and sustainability everywhere in the world, particularly in the Latin American countries that took a heavy toll from the financial crises of the past decade. The author shows that a solidarian economy can only function with renewable energy. Conversely renewable energy can only be broadly applied when the economy is organized in a solidarian way. Solidarity and fairness require a new kind of political regulation on local, national and global planes.
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