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Disinformation as a Strategy of Power (Part II)

by Gisbert Otto Monday, Aug. 01, 2005 at 10:05 PM

"Perpetual growth is not possible in nature or anywhere else..Globalization, the free market with its absolute competition protected by the WTO agreements doesn't have anything to do with fair competition...A global network of resistance is developing.."


A Critical Analysis of the Economic System and Alternatives

By Gisbert Otto

[This article published in: Zeit-Fragen Nr.29 7/18/2005 is translated from the German on the World Wide Web, http://www.zeit-fragen.ch/ARCHIV/ZF_131d/T04.HTM.]

Part I of this article – starting from the so-called capitalism criticism of the SPD chairperson Franz Muntefering – showed that a serious discussion of the present economic system has not occurred. This discussion is urgently necessary since incomes in the last 30 years have developed to the disadvantage of the working population worldwide. In other words, business profits massively increased to the detriment of wages and salaries. How was this development possible? Why didn’t people oppose this trend? One explanation is that this development was driven by disinformation while human labor is no longer indispensable for capital today. Technical progress makes people superfluous in large part.

However this may not be said out loud. That the so-called class struggle is antiquated has to be veiled. Only the struggle from top to bottom remains since labor is no longer a means of power. The one-sided struggle continues through exploitation of international wage differences. With worldwide propaganda and enormous financial expense, neoliberalism is seen as the only true economic form.

Word distortions mislead people. For example, positive phrases like “flexibility of the labor market,” are used that mean nothing but abolition or limitation of termination protection. Lies are used to convince citizens that the well-trodden way is the true way. For example, when the economic upswing does not happen, Great Britain is offered as an example, the country with low unemployment and good growth. Wage cuts in Great Britain are actually a third lower and social conditions are at an all-time low.

Part I of this article ended with the question whether growth is still the decisive reality.

Perpetual growth is not possible in nature or anywhere else. Growth today is a reality that is no longer of towering significance for the majority of people since only a small minority profit from growth, not the working population. In addition, growth happens almost only through investments on the financial market and no longer through creation of jobs – as explained in Part I. The May 2004 election in India was a classic example for assessing the growth question


“India is shining.” The BJP government party of Atal Bihari drummed this message into the heads of voters for months: double-digit economic growth, worldwide fame for Indian software specialists and India as a rising economic superpower. That was the message. However voters seemed to ask themselves, particularly voters in the 1 million villages: How does this benefit us? What good is growth without more jobs, without electricity, without water and without streets? The election ended with a debacle for Vajpayee.

Nevertheless growth is constantly emphasized as though the people would profit from it. This is an error like the promises of neoliberalism. Its effect on people of the northern and southern hemispheres and the military consequences will be summarized in the following sections.


Article 14,2 of the German constitution declares: “Property obligates. The use of property should serve the well-being of the general public.” This social obligation of property is annulled in the drafted EU (European Union) constitution. The neoliberal economic form – absolute competition – should be in force. Although every student of economics learns in the first semester that competition is the motor of the economy and growth, this is not true unrestrictedly. When we respect a person as a person and not only as mere labor power, we must meet his basic need for existential security – as was very clear to everyone in the social state of the 1980s. The security and prosperity of the whole people are vital, not only the wealth of an international elite. Certain economic laws are also valid for trade as also in medicine. A medicine offered in the right measure can help but in excess becomes a poison.


Whoever believes that the great differences in international wage levels can be equalized through innovations, rationalization, diligence and efficiency is an illusionist (or harbors dishonest intentions). A business in a high-wage country must operate with wages that are 30 times as high as in some Asian countries. To illustrate this, the following picture can be helpful: One worker drags a sack of cement while 30 sacks (=1.5 tons) are loaded on another worker or buries another worker.

These facts are suppressed in the media. Instead the reader is only informed about one side. Here is an example from an article in the “Neuen Zuricher Zeitung,” June 11/12, 2005. An opinion from the top management of the Credit Suisse group is quoted: “To transfer jobs in Switzerland to motivated persons in Asia would hardly be cool.”

These words are only directed to a few. For the working population, they are a crass deception. Managers and politicians today seemingly speak from secure posts. The water will never reach their necks. Their future is assured. The existential flexibility demanded of everyone else will not be demanded of him or her.

Globalization, that is the “free market” with its absolute competition – protected by the WTO agreements – does not have anything to do with fair competition. Rather this “free market” is a challenge of international capital to employees in high-wage countries. Only winners of the total worldwide competition are “global players.” As long as we still have functioning states and democracies, our politicians should be forced to discuss alternatives so proper counter-measures can be introduced. France and Holland demonstrated this. We can only support their courage and their open resistance.


After the phase of political decolonization, the term “developing countries” is used, not colonies. This nourishes the illusion everywhere that a phase of decolonization has dawned. This is not true. On the contrary, former colonies experience that the new global free trade policy today forces them again to the status of colonies of the rich industrial countries.

The campaigns of diverse relief organizations also cannot alleviate the misery. Rather they add even more harm to a society’s capacity for independent reproduction since the products of native farmers cannot compete on the local market with the cheap or free shipments of relief organizations.

People in the indebted countries of Asia, Latin America and Africa experience the meaning of “free trade” in their own bodies much before people in rich countries. The free trade policy of the World Bank, IMF and WTO plunged many into misery while domestic and foreign elites enriched themselves.


“Armament mania exists as in the Cold War; record sums are spent on armaments” (.3 trillion worldwide: the lion’s share – 47% - is charged to the account of the US). The EU also arms and would have been obligated to rearmament according to the EU constitution that has no crumbled.

Building professional armies that can be deployed worldwide is striking. Military force is used to secure access to increasingly scarce raw materials – for example, the oil in Iraq. Thus war returns as the continuation of a miserable policy with archaic means. The three crucial developments mentioned at the outset (1. Disappearance of the counter power, the Soviet Union; 2. Enormous technical progress with increased productivity and 3. Devaluation of human labor power that is dispensable for international capital today) should be supplemented with a less known trend.


The fourth development involves the networks of the superrich and their strategies. A relatively small elite controls the worldwide financial streams that move in the quintillions through their networks with gigantic financial expense. Nevertheless they claim there is no money any more. Everyone must work more efficiently and the social achievements cannot be financed any longer.


The number of superrich with assets over 0 billion who form today’s power centers are estimated at two- to three thousand worldwide. They exercise their power in building controlling networks. Hans-Juergen Krysmanski who has researched the power elites writes:

“Since the 19th century, the rich and superrich of the US have understood how to tie a close social net by marrying among themselves through elite universities and institutions like the Metropolitan Museum of Modern Art or the Metropolitan Opera, founding citadels of power where they sit on the boards of directors and shifting their posts to one another. A social cohesion arose in the US that we in Europe do not know. This is very understandable when we consider European fractures, wars and revolutions.. All this did not occur in America so this class developed in a very coherent and integrated way. This social coherence is the basis for organizing control..”

In the meantime the American process of forming political will in Washington does not take place in Congress, the Senate or even in the presidential administration. Ideas, strategies and visions are formulated in the triangle of elite universities, think tanks and foundations and then brought into the political process down from above through persons, financial streams, ad hoc commissions, lobbyists and advisors. No ideas or visions come from below – as in the sixties. Everything is pre-fabricated…” (“Machiavelli in the XXI Century,” feature on German radio, May 27, 2005)


Consensus in the social state was the foundation for the further development of democracy in the modern age. A kind of assurance was shown by the government as a representative of society to protect against blows of fate that can strike anyone. The social state guarantees continuity and reliability to create equal life chances for everyone. A culture that dreads a new inscrutability through discontinuity, unlimited mobility and flexibility must produce fear among the majority of people. The weakest are afflicted most miserably since they have neither the financial nor the cultural resources to cushion the negative consequences.


A powerful stream of information and pictures guides the release of information by the media. This runs 24 hours around the clock at all corners of the planet, influences people and is more dependable than any censorship in the times of totalitarianism. For a news report to be perceived in this wilderness of inscrutability, it must reach citizens repeatedly and simultaneously on different channels. Opinions deviating from the social mainstream simply disappear in the whirlwind of the media industry without any constraints.


“Accelerated” Capitalism

The American sociologist Richard Sennett described the social and mental consequences of the new post-industrial forms of organizing work: extreme abridgment of labor contracts, work biographies in which linear careers are rare, loss of social cohesion through work in technically interwoven teams scattered to all four winds after a few months.. The extreme flexibility and mobilization of the world of work encroaches deeply in the psyche of persons and produces a dangerous stressful state.

“Accelerated capitalism” is a system that increases social inequality in a dramatic way. A new form of power concentration occurs. Power is exercised by an ever-smaller group of political actors as in the most modern business structures. This allows faster decisions by a few which is regarded as very positive. For society, this focus on a very few actors is very problematic since the citizen via television becomes convinced that the great men of action are relatively sovereign in their decisions. However we know that politics cannot be left to a few actors but requires a complex institutionalized process guaranteeing a democratic formation of will and decision. To a great extent, democracy lives from its institutionalization, institutionalized processes and procedures. This is part of the constitutional state and its transparency.


One could be tempted to assume that the powerful have successfully created an invisible power. This power could then be traced in the structures of the accelerating new capital system where human striving for existential security is exploited. In other words, acceleration and power concentration operate as subject-less processes driven by the powerful stream of financial capital and the new technologies. The relatively small number of actors in this virtual economy may remain unrecognized. Invisible power is a double power. The representatives of “power structure research” like Noam Chomsky and Hans-Juergen Krysmanski try to track down the concrete actors.


“The financially powerful, the super-powerful who are partly no longer active economically, are really in the center. They can devote themselves entirely to their cultural and social tasks while being supported and surrounded by a ring of corporate managers and chief-executive officers who watch over these assets and multiply them. Around this inner core there is a group of the most important politicians who have the task of making the distribution flows plausible to the public. Around these three inner rings is an outer ring, the experts, media people, technocrats, scientists and so forth who make inventions and formulate maxims that then come in the media. These rings, corporate elites, political classes, technocrats and knowledge elites are not uniform or homogeneous but often torn in pieces.” (“Machiavelli in the XXI Century”, feature on German radio, May 27, 2005)

Technologies are not neutral instruments in a world marked by crass economic inequalities whether one assumes anonymous system processes, individual actors or a combination of the two. They bring about both a quantitative concentration and a qualitative expansion of rule. The traditional structures of western societies with their democratic controls are oriented more in the “low-tech” than in the high tech of power. This can be illustrated in the example of the development of war technologies.


In times when vast armies were needed for victory, the patriotic feelings of a whole society had to be first stimulated. Bringing masses of people to voluntarily sacrifice their life was always a protracted and expansive undertaking. Enormous armies and compulsory military service belong to the past. Small highly specialized units outfitted with top technology take their place. This makes waging wars dangerously simple. A whole nation does not need to be convinced any more. Whoever controls top technology today gains the freedom to evade the consequences of his actions. He can ignore things that were very important in the past. This is a great danger for democracy.


Learning to understand the whole context – the structure of the system – is vital. Otherwise only symptoms will be treated. The current economy makes it possible for example that New Zealand butter is cheaper than domestic butter produced a few miles away. British apples are flown to South Africa, grown there and then brought back to Europe. The transportation costs are not considered in the price. “We have political prices,” said Helena Norberg-Hodge, winner of the 1986 Alternative Nobel Prize. Jacob von Vexkull introduced the Alternative Nobel Prize 25 years ago.

A retrospect on the development of liberalism could help us question the system of neoliberalism.


The fundamental task of a liberal state is assuring that “the freedom of the individual ends where the same freedom of the other begins.” The liberals of the 19th century understood this and were the state-supporting party because it pursued the public welfare. In contrast, (neo-) liberalism has in large part degenerated to an economic liberalism. When the labor market is no longer able to secure existence and guarantee the social integration of people, the public should insist that the system be changed.

The development of an alternative economic system would not be a problem. Europe is large enough with its 450 million people to form an independent market. Conversion into practice will be far more difficult. Introduction of protective tariffs will be necessary to reach a social market economy deserving its name. These tariffs will not screen, as neoliberal critics would immediately object. Their goal would be maintaining social working conditions or protecting certain industrial branches. Nothing would happen other than what was accepted on all sides in the sixties and seventies in the European states and what is done today for example by the US in protecting its own steel production. Establishing a domestic European market is a political, not a practical problem. The prerequisite would be a reversal of thinking as expressed so impressively for example by Ludwig Erhard.


“I believe the best security is when the individual person regains the consciousness and certainty that he can form his fate himself on the basis of his achievements and his work.”

Our world is far removed from this humane and rational socio-political perspective. In addition, the danger of a new totalitarianism also exists through the economy’s extensive grasp on people and nations.


The present international economy is so successful and makes such enormous profits because the obstacles to the productivity of capital are cleared away more and more and capital has become an end-in-itself. Only absolute striving for power is emphasized. This striving for power can be illustrated in the example of Germany. Again and again Germans faced the shame of being handed over to the striving for total power of the pan-Germanic empire. Remembrance of the suffering inflicted on other nations and their own people is kept alive across generations. This is a part of German history. Don’t we have the responsibility to grapple intensely with the underlying problem – blind faith in authority? Isn’t it our task to be engaged so that blind obedience no longer occurs – neither in Germany nor in other countries? Wouldn’t that be real compensation? This does not seem convincing today. People have the impression that a culprit has been found in Germany who must take the rap for blind obedience in the Third Reich. This is demanded from all nations.

The authority-problem, the above and below, rules the whole world with recurring exceptions. France and Holland broke through the authority-gullibility and demonstrated that resistance is possible. This historical achievement will have consequences when other people and nations follow their independence.


The superrich and transnational corporations as well as those who disapprove of the present social situation use the great advances in information technology. A global network of resistance is developing that was decisive for the French No to the EU constitution. The worldwide anti-globalization movement repulses the pressures of the West –the Washington Consensus, WTO and GATS –. Countries of the South clearly see through the connection between free trade and globalized striving for power. This consciousness has grown worldwide since people have a sense for justice.


We cannot expect any insight from the powerful. In their irresponsibility, they are well on the way to making the earth increasingly uninhabitable. One thinks only of China’s economic potential. The Chinese people have the same claim to prosperity that we in western countries have. The resource need for the 1.3 billion people is so great that it must be obvious for everyone that the neoliberal way of total competition and consumption needs correction. A rethinking in the interest of all people is necessary. However the powerful will not abandon their power. They are much too strongly bound in the complex of power and cannot usually break out. On the other hand, breaking out of the prison of lies, distortions and striving for the top is possible. In becoming aware of the structures of this system, we cannot leave the system but we can no longer stabilize it by blind participation. We can recognize the gaps that lead out of faith in authority.


The system of competition that exploits the great differences in the international wage structure has a negative effect for all and participants – aside from the capital side. The fellow foreign worker labors for a trifling wage. He lives separated from his wife and children and does this because he absolutely needs money. This is very understandable. The domestic labor market falls under the pressure of lower wages so the domestic employee receives less in wages. Both employees must put up with this disadvantage because capital exploits the existential distress of people and spreads the lie worldwide that a person is only labor power, not a person.

Uncovering this lie is imperative for all of us instead of persisting in merciless competition. We will only have peace and a reasonably good life when we are anxious that this will also be possible for all other people and nations on earth…

Only if Switzerland refuses integration in power blocs can it remain faithful to its tradition (direct democracy where the people have a right of co-determination).


The current debt cancellation for developing countries initiated by Prime Minister Blair is eyewash because the problem of developing countries is poverty and corruption. This indebtedness will continue because the poverty cannot be redressed. Relieving poverty will be first possible when these countries can free themselves from the pressures of western free trade – the so-called opening of the markets – because this always benefits the western countries. The strong protests of the countries of the South at the WTO conference in Mexican Cancun in September 2003 ultimately led to the breakdown of this conference:

“The gulf between the speeches at the last meeting in Doha and the reality in Cancun was great. In the final draft, there was no mention about the starving West African cotton farmers who cannot keep up with the subsidized exports of the Americans. Suddenly a minimum reduction of the billions in export subsidies had to be haggled over. The EU is concerned that European agricultural products reach the markets of the South cheaply.” (DIE ZEIT Nr.34/03)


The American sociologist Richard Sennett also sees the totalitarian danger. He describes the development of societies to undemocratic structures as “soft fascism.”

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