Transcript Richard Detje/Wissentransfer Die große (Finanzmarkt

Richard Detje
Overcome the systemic crisis of
capitalism
What are the social-economical dangers
and opportunities?
transform!europe
Palma de Mallorca, March, 12th - 13th, 2010
www.sozialismus.de
www.wissentransfer.info
Contents
I.
Interpretation of the crisis
II.
European capitalism in transition
III. Perspective: 5 arguments for a long run
IV. Crisis and day-to-day consciousness
V.
Strategic projects for transorm!europe
2
Interpretation: systemic crisis – hegemonic crisis




The current crisis is a break with the past - constitutes
a new situation in economy, society and politics
The reason is not the depth of the economic slump
(figure world industry Eichengreen/O‘Rourke, 3/2010)
Release from the logic of a Great Depression:
success of stimulus packages
This proofed the flexibility of the convervative bloc:
from neoliberalism to „soft convervatism“
This crisis deals with systemic contradictions:
 a crisis of the accumulation regime (financial
market driven)
 a crisis of the model of regulation (Shareholder
value, privatization, market state, US-hegemony)
Crisis of the model of regulation in Europe means
 crisis of unbalanced competition (Germanys
export oriented model)
 crisis of the monetary system and the stability
pact (Euro, ECB – coming out with the Greececrisis)
 crisis of social integration (European Social
Model)
3
 crisis of EU-enlargement
Challenges


This crisis has not come to an end – it just has begun. This means:
we need politics for a long run
Even the bourgeois bloc does not have a unifying new hegemonic
„idea“ of systemic reforms
After World War II this was:

Fordism
 Welfare state (Beveride Plan, Scandinavian Model, „corpratism“)
 World currency system (US-hegemony)


There is no equivalent political programme in these days
Rescue and stimulus pakages are designed only for the short run
without new dynamism of a new accumulation regime
Effect: redistribution from the state (i.e. the people) to the banks:
speculative „accumulation by dispossession“ (David Harvey)
4
II.
European capitalism in
transition
5
We have to consider different regimes of capitalism
Germany: „corporate negotiated capitalism“ based on high competitiveness and
conservative welfare state – shift to fragmented economy (external/internal) –
industrial relations now: from social partnership to corporatist crisis management
– challenge: transforming a export oriented capitalism
UK: for long flagship of „liberal market economies“ – big financial market +
deindustrialization – inequality/segmentation in labour market – but: public
spendings in the framework of „market state“ (NHS, education etc)
- challenge: future beyond finance driven capitalism (City of London)
Spain/Italy/Greece: fragile manufacturing sector (E: construction sector – IT:
industrial districts) – family based welfare regime – large informal sector – high
fragmentation of labour markets
- challenge: how to cope with competitiveness and public deficits?
Scandinavia: high competitiveness + social-democratic welfare state – strong
pressure to exclusive welfare (populist right)
– challenge:how to cope with growing unemployment?
Central Europe: challenge: delinking after enlargement?
Caution: crisis have never been great levellers
6
West European regimes in the crisis (+/-GDP/%)
8
6
4
2
Sw
ed
en
Fi
nn
la
nd
Sp
ai
n
ec
e
G
re
Ita
ly
la
nd
K
U
m
an
y
Ire
-4
G
er
Fr
a
-2
nc
e
0
-6
-8
-10





2006
2007
2008
2009
2010
2011
financial market economies are worst – export oriented economies are not
better (Greece better than on financial markets)
perspective: stagnation (GDP less than productivity)
Germany will proceed with beggar my neighbour policy – more pressure on
competitiveness
Growing ditch between North and South – how to deal within a monetary
union?
A shift in hegemony: from constraints plus leadership to a regime of
7
fragmentation, rivalry and chauvinism?
Eastern europe in the crisis (+/-GDP/%)
15
10
5
0
-5
-10
d
an
l
Po
H
ry
a
g
un
a
vi
t
Le
-15
-20
2006
2007
2008
2009
2010
2011

Poland: preventing recession with internal growth
- but: is this a perspective within europe?

Hungary: almost unregulated market economy (deregulation/privatization) FDI-driven trajectory (eg. car industry) on low road – strong expectations on
welfare state
- how to survive as a dependend workbench?

Latvia: credit-financed (foreign currency) growth-regime
- how to get out of a deflationist spiral?
8
III.
5 arguments for a long run
9
1. US-hegemony and global imbalances


US-economy: 20% of world
GDP – locomotive during the
previous business cycles
Financed by three deficits:

deficit in balance of payments
(2007: 731 billion $)
 public deficit
 credit financed private
consumption (loans, credit
cards, car credits etc.)



Neoliberalism: a regime fueled
by dept
accumulation by dept: this
growth regime is gone (more or
less)
BRICs cannot compensate this
Perspectives:

turbulences in the world
currency system (Dollar –
Renminbi)
 stagnation
 chance for Europe with
balanced trade (a big internal
10
market)
2. Financial risks and credit crunch

up to now: no new regime of regulation
destruction of the shadow bank system, socialization or dismantling of financial
institutes relevant for the whole system, public control of the entire financial
system, public rating agencies, control on CDS, ban of CDO, regulation of
Hedgefunds and Private Equity, etc.
11
3.Higher level of unemployment – weakening of internal market
If stagnation-szenario is
plausible
than productivity > growth =
higher rate of unemployment
Rise of Unemployment in Western Europe 2007/8-2010

Fi
nn
la
nd
Sw
ed
en
Sp
ai
n
re
ec
e
G
Ita
ly
Ire
lan
d
er
m
UK
an
y

G
Fr
an
ce
20
18
16
14
12
10
8
6
4
2
0


Growth of Unemployment in Eastern Europe 2007/8-2010
25

19,3
20
effect 1: pressure on wages
effect 2: bad jobs
effect 3: less purchasing
power in the internal market
effect 4: untermining welfare
state
effect 5: shrinking tax
revenues
15
11,1
10,2
10
7,4
7,1
Deflation can be the result for
Europe
6
5
0
Poland
Hungary
Letvia
12
4. Exit-strategy: from fiscal stimulus to deflation policy
public dept 2007 and 2010
5

shift to austerity in nations
fiscal policy and in europe:
after Baltic states, Hungary
and Rumania now Greece

de-democratization:
C
en
t
ra
l
U
S
Eu
ro
pe
ec
e
Sp
ai
n
Ire
G
re
la
nd
K
U
nc
e
Fr
a
G
er
-5
m
an
y
0
-10

governed by financial
market speculation
-15

Budget control by
Commission and IMF
-20
payable gov bonds 2010: PIIGS
70
„deflationary shock“

deepen the ditch within
Europe - new chauvinism

big redistribution of costs of
crisis:
62
60
52,7
47,2
50
50,2
45,7
41,2
40

35
33,1
30
20
24,7

from the states to the
banks (2 times: to
safeguard them and for
high interests)
Dec

from state to the people
12,8
10
0
March
April
May
June
July
Aug
Sept
Oct
Nov
13
5. Social inequality

Bringing this together with austerity in Europe:
end of the European Social Model?
14
IV.
Crisis and day-to-day
consciousness
(in Germany, but perhaps similar in other
countries?!)
15
The reason for the financial and economic crisis is...
14,5
... are the foreigners
... is the exploitation of the
welfare state
52,6
58,8
... Is our economic system
73,2
... is the capitalist system
89,1
... banks and speculators
0
20
40
60
80
100
16
"Our society is more or less fair/unfair"
80
71
70
71
70
50
56
54
60
41
40
fair
40
25
30
not fair
26
24
20
10
0
2000
2007
2008
Apr 09
Sep 09
17
"The social market economy has proved to be sucessful"
80
70
60
50
40
30
20
10
0
73
20
69
21
71
70
63
56
54
36
34
50
40
51
41
52
yes
38
no
26
19
18
1994 1996 1998 2000 2002 2004 2006 2008 Apr 09 Sep
09
18
"For the future of the economy we need ... "
more market
more social security
don't know
70
60
60
55
50
61
48
40
40
30
20
57
25
22
41
37
43
29
24
27
14
10
8
12
24
22
14
9
23
11
0
5 94
10 98
9 02
5 06
9 07
5 08
4 09
9 09
19
The polls show:




although the economic crisis has been absorbed on the labour market:
there is an understanding of systemic risks („capitalist system“/“our system“)
although even conservatives realized the necessity of the „automatic
stabilizers“ of the welfare system: there is a growing criticism of social
injustice, social splitting and comeback of class society
therefore: the economic system is called into question by a growing
monority
therefore: desire for more social security and active role of state intervention
(but a socially reformed state)
But: this criticism does not mean social mobilization for social emancipation
 the most vulnerable social classes are fragmented and splitted
 the most vulnerable social classes have a feeling of fatalism: „we do not
have the power for change“
 there is the danger of the growing prejudist and resentment against and
„others“ (foreigners etc.) – this is what Rober Castel means talking about
the comeback of the „dangerous classes“)
This should make clear the impotance
 of collective intervention by alliances out of the civil society
 of trade unions with political mandate
 the „party question“, i.e. the reform of the concept „party“
20
V.
Strategic projects
„Hegel remarks somewhere that all
facts and personages of great
importance in world history
occur twice. He forgot to add:
the first time as tragedy, the second as farce.“
Karl Marx: The Eighteenth Brumaire of Louis Bonaparte (1852)
21
tragedy and farce
Can a big crisis happen again?
John K. Galbraith 1954: No! The political and
economic elites have learned:
„Without any doubt: a lot of weak spots,
which occured 1929 and later, have been
wiped out.

The distribution of income isn‘t as top-heavy as ist was ... [in 2007:as worse as it was]

The omnipotence of investment-trust was very much cut down in the years following
1929 [in 2007: restored]

Unemployment insurence ... for the workers. Together with the other parts of the
social security system – pensions and public aid – this helps to protect the wages and
to safeguard the purchasing power of big parts f the population [Reagan said: starve
the beast]

The tax-system we have today guarantees more stability than that from 1929.“ [in
2007: distributed from below to the top]
(John Kenneth Galbraith: Der große Crash 1929 (1. edition 1954), pp. 230)
22
An old approach
– with new thinking



„Our argumentation comes to the
conclusion, that in our times the
growth of wealth doesn‘t any
longer depend on the abstinence of the rich, as it is
normally thought. Indeed, it is delayed by them.“
This means: we aren‘t any longer living in a world of
shortage, but in a world of plenty – hegemony of finance
markets is the capitalistic form of this.
What is nessesary (according to Keynes):




death of the property manager – low interest rates
socialization of the investments
progressive taxes for strong public investments and work
programmes
radical reduction of working time
23
Concepts for today: two transform! initiatives

renewing concepts of economic
democracy
reorganizing industry - initiatives for sustainable growth – workers
democracy (against the iron rule of competition of all against all) –
draining the financial markets
and reshaping the world of labour:
a european initiative for good work to stop the precarious
fragmentation of the working classes (against workfare policy –
bringing solidarity back in)
and giving a progressive answer to post-democracy

initiatives for a new european social model
reshaping the fabric of society: abolition of poverty – social security
and social justice – bringing the fights against austerity politics
together – preventing the comeback of the „dangerous classes“ (R.
Castel)
24
Thanks for listening
25