- js reader version
- view hidden posts
- tags and related articles
by Elmar Altvater
Saturday, Dec. 03, 2005 at 5:46 AM
The fianncial markets, the fifth branch, are probably the most important markets today. Many remain excluded from this time- and space compression. Most people are barred from the advantages of globalization like greater mobility and improved communication
THE FIFTH BRANCH
The Economist Elmar Altvater on the Emancipation of the Financial Markets from States and Politicians and Time-Space Compression in the Age of Globalization
[This interview published in: Freitag 45, 11/11/2005 is translated from the German on the World Wide Web, http://www.freitag.de/2005/45/05450301.php.]
FREITAG: The hardcore issue of balancing interests in our society – redistributing disposable income in the sense of distribution justice – is largely ignored by politics today. What remains is regression from a participative social democracy to a purely formal democracy. Is this a kind of negative end of politics that gives up because it can do nothing beyond the status quo?
ELMAR ALTVATER: A base consensus is necessary in a democracy. The parties differ programmatically from each other but agree on this consensus. In the old Germany, this consisted in the famous and sometimes infamous liberal-democratic order, the western orientation and freedom rights with a social state foundation.
This base consensus does not exist any more but has been replaced by confession to a plural society. This means those with economic power have much more influence than those without economic power. There is only a very formal understanding of procedures of democracy whose substance is undermined. This is a great danger because democracy needs substance. People want an active participation in distributing the jointly produced prosperity, not only in elections every four years. There is no base consensus about this any more because this distribution is a matter of the market that has nothing to do with the political process.
FREITAG: In the meantime citizens have a partly repulsive relation to the actors on the political planes. Is this justified? Aren’t politicians artists in the circus dome, helpless and without courage to admit their powerlessness?
ELMAR ALTVATER: Politicians are actually at a loss. They are stripped of power. There is a wonderful book by the SPD Bundestag delegate Hermann Scheer titled “Politicians” that comes to this conclusion from his own experience. He describes how many international treaties are negotiated by the bureaucracy and then ratified. The parliament has no possibilities any more for changing anything. Only acclamation is left. Decisions are made without cooperation. The rule of the executive becomes stronger the more globalization spreads. The result is an emptying of political participation.
FREITAG: With globalization, the market emancipated from the society has gained an unparalleled degree of independence. How can we find our way back?
ELMAR ALTVATER: Many see the worldwide market system as a condition for democratization since the market offers elective possibilities for consumers as democracy offers elective possibilities for citizens. This is transfigured into a parallel. Democracy in the world is said to grow with the expansion of the market. This is a very optimistic and possibly mendacious idea because the market is a practical necessity to which politics has to orient itself – against the decision-making authority of the sovereign, the population of a country. The sovereignty of states erodes with globalization. States no longer play the role they originally played in the concert of the powers.
FREITAG: The financial markets are a decisive reason for this loss of sovereignty. Is this a mechanism for depriving states of power?
ELMAR ALTVATER: The financial markets are probably the most important markets today. They embody external practical necessities. The former chairperson of deutsche bank, Brauer, spoke of financial markets as the fifth branch in democracy, after the legislative, executive, judicial and media branches. No one can do anything against the financial markets, Brauer said. Rating agencies evaluate the credit-worthiness of businesses and states. The lower their assessment, the higher the interests. However interests must be paid from state budgets. Funds are lacking for other projects.
In any case, the sovereignty of a government or state is limited in controlling capital-money transactions. The great financial crises in Asia and Latin America showed the power of financial markets on national societies and large parts of the population.
FREITAG: You said Oscar Lafontaine’s resignation as minister of finance in March 1999 should be seen on this background.
ELMAR ALTVATER: Yes. Much is still a mystery in this resignation. The financial markets doubtlessly spread the most vicious propaganda against Lafontaine. Ads were inserted in the mammoth British newspapers against “Europe’s most dangerous man”. What was the reason? Because he introduced controls on capital transactions and wanted to stabilize volatile exchange rates. He wanted to establish target zones for exchange rates.
FREITAG: That would have been good for small and medium-sized businesses.
ELMAR ALTVATER: …and for developing countries that usually get nowhere against the financial speculation of the great funds of banks and multinational corporations. In this situation, the financial markets were passionately against Lafontaine. How this happened in detail and how his resignation occurred has not been explained.
FREITAG: The technological dimension of time plays a role in your analyses alongside the abolition of the spatial borders of the nation-state container. Can the breaking of a time barrier endanger democracy?
ELMAR ALTVATER: One definition of globalization says: we live with a compression of time and space, practically destroy the space in which time is accelerated and fly from Germany to east Asia in ten hours. In other words, space no longer plays the role of a sound barrier that it played for past generations. Many remain excluded from this time- and space compression. Most of the earth’s population are barred from the advantages of globalization like greater mobility and improved communication.
All this has important consequences. One consequence is that time and space are the coordinates in which nature moves. We destroy nature with compression, the destruction of space and time. This is very obvious. The ecological consequences of economic processes in the age of globalization are well known. One thinks of the role of transportation in carbon dioxide emissions. A second consequence is that democratic participation is restricted because participation needs time, leisure and peace. As a result, all acceleration, a necessity of globalization, tends to limit the democratic rights of citizens. Typically enough, a law in Germany, the acceleration law, enables rapid road construction. The so-called practical necessities are carried out. Politics does what it can to make this possible.
FREITAG: In other words, is there a collision between the rhythms of markets and the rhythms of democracy?
ELMAR ALTVATER: Yes. There are many rhythms of time that can collide. This was always true but has intensified with globalization. The time rhythms of markets and innovation speeds are such that crashes often occur. The introduction of new streetcar systems by Siemens was under such time pressure that the vehicles were not really ready and had to be withdrawn because they were too dangerous. That cost hundreds of millions of Euros. The compressors with Daimler-Benz were developed too quickly and had to be recalled. Rhythms are introduced that contradict both the necessary innovation rhythm and the rhythms of people. This is true for the rhythms of political processes.
FREITAG: and the rhythms in which nature develops.
ELMAR ALTVATER: Nature needs far more time than the economy allows. Many people now suffer from this.
FREITAG: The tendency of this new capitalism to produce an increasingly radical economic inequality and dodge the principle of the political equality of all citizens also seems ominous for democracy.
ELMAR ALTVATER: Obviously. This is also not desirable. But when the rich spend 0,000 or a million dollars at a dinner with the president of the United States for the election campaign or to reelect this president and these persons are rewarded with ambassador posts to Germany or Great Britain, we witness a very dubious side of democracy.
FREITAG: The power of market forces brings about a loosening of the cohesion in society, you write. Is there a real danger of the crumbling of the community of fate as the nation state is often described?
ELMAR ALTVATER: Yes. Through cuts of social benefits, many people have lost a vital protection since they cannot manage with their incomes. Then they fall out and a piece of cohesion is lost. When one walks through cities today and asks about life ten or twenty years ago, one sees the loss of social coherence. In the past, there weren’t as many beggars and homeless in a rich country like Germany. Our country has begun to resemble a third world country like Brazil. The famous net of social security decried by Helmut Kohl as a hammock began to curl up. Red-green only continued this. Much coherence was lost.
FREITAG: What will replace this cohesion? Was democracy only a fair weather arrangement for the times of growth and prosperity?
ELMAR ALTVATER: Dangers follow when one binds democracy to growth knowing that growth reaches its limits. From the logic, this means democracy also strikes its limits. Ludwig Erhard said explicitly: everyone receives a piece of the ever-larger cake. Everyone doesn’t receive an equally large piece but one that becomes larger from time to time. Inequality can be endured. But when growth fails to occur, no increases are possible any more. Reductions must be distributed. This is very hard for a democracy. New conflicts come to us. The inclination to solve them in an authoritarian way will certainly be great.
FREITAG: You said the democratic question is radicalized by the crisis of ecology. What do you mean?
ELMAR ALTVATER: When living conditions worsen through the ecological crisis and growth must be restricted to solve them, there are three possibilities of gaining an upper hand. One could solve this through the market so some come off fine with increasing inequality as in emissions trade and the others have to bear the whole burden. Or one solves the whole in an authoritarian way by the military. In the meantime, there have been many scenarios. The Pentagon has a game plan. What happens when the greenhouse effect leads to the Gulf Stream of the northern latitudes of the Atlantic becoming colder owing to the greenhouse effect and then streams of refugees arise? How can we keep this at arms length?
The third variant is the solidarian variant. One asks how will the energy resources be distributed when we can no longer fall back on cheap oil. How can we realize a society that concentrates on renewable sources of energy? How can we prevent the ruination of our landscape? How can we reduce the greenhouse effect? What can we do to preserve the biodiversity – a prerequisite for the evolution of life? We humans are part of this life. We cannot develop if the nature around us dies off.
Report this post as:
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
Nuclear Shutdown News March 2018
Join The Protest Rally in Glendale on April 10, 2018!
Join The Protest Rally in Glendale on April 10, 2018!
Spring 2018 National Immigrant Solidarity Network News Alert!
Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A.
Steve Mnuchin video at UCLA released
Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups
After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video
Resolution of the Rent Strike in Boyle Heights
What Big Brother Knows About You and What You Can Do About It
Step Up As LAPD Chief Charlie Beck Steps Down
Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29
Don’t let this LA County Probation Department overhaul proposal sit on the shelf
Echo Park Residents Sue LA Over Controversial Development
Former Signal Hill police officer pleads guilty in road-rage incident in Irvine
Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents
Center for the Study of Political Graphics exhibit on Police Abuse posters
City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre
Professor's Study Highlights Health Risks of Urban Oil Drilling
Claims paid involving Pasadena Police Department 2014 to present
Pasadenans - get your license plate reader records from police
LA Times Homicide Report
More Local News...
Shadowgun Legends Hack and Cheats
What does the Quran Say About Islamic Dress??
Biodiversité ou la nature privatisée
The Market is a Universal Totalitarian Religion
Book Available about Hispanics and US Civil War by National Park Service
The Shortwave Report 04/20/18 Listen Globally!
The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder
Paraphysique de la dictature étatique
Book Review: "The New Bonapartists"
The West Must Take the First Steps to Russia
Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine
The Shortwave Report 04/13/18 Listen Globally!
“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize!
The World Dependent on Central Banks
Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine
March 2018 Honduras Coup Again Update
Apologie du zadisme insurrectionnel
ICE contract with license plate reader company
Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes
Prohibiting Micro-Second Betting on the Exchanges
Prosecutors treat Muslims harsher than non-Muslims for the same crimes
Amy Goodman interview on cell phone safety
Mesa, Arizona police officer kills unarmed white man
Israeli leaders should be prosecuted for war crimes
Paraphysique de l'autorité
More Breaking News...