We had a server outage, and we're rebuilding the site. Most of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Creditor instead of Citizen

by Werner Vontobel Tuesday, Oct. 03, 2006 at 6:38 PM

Do the capital markets undermine democracy?



By Werner Vontobel

[This article published in: Blick, 9/23/2006 is translated from the German on the World Wide Web, ]

The global capital markets destroy democracy. Economic historian James Macdonald said this. The most recent events in Budapest, Warsaw, Berlin and Brazil confirm this.

Last week in Hungary, the public discovered a tape recording in which Prime Minister Ferenc Gyurcsany admitted: “We lied in the last one-and-a-half to two years.” Mass protests followed. The police and hordes of rightwing extremists and hooligans staged wild street battles.

The reason for the lies is clear: Hungary is heavily indebted. The state debt amounts to 70 percent; the total debt to foreign countries is even 170 percent of the gross domestic product. Hungary’s government is the hostage of creditors. Every wrong decision (from the view of the finance markets) can massively devalue the forint and make remote Hungary’s entrance in the Euro-alliance. Thus the government obeys the finance markets and lies to the voters.

In heavily indebted Brazil, Lula da Silva four years ago had his election program dictated right from the start by the “markets” or the International Monetary Fund. The creditors were also the main beneficiaries of his first term in office.

The NZZ (Neue Zurich Zeitung) summarized: “Da Silva has to look good to the financial investors at home and abroad. Brazil has paid back the billion credit to the International Monetary Fund. Banks, state pension funds and private investors at home and abroad have benefited enormously on the background of high real interest rates. The local bankers posted record profits year after year. It is no wonder that praise for da Silva can be heard above all from the diverse actors of the finance markets.

In Poland, the “markets” enforce their will. Zula Gilowska, “a very respected economist in the finance markets” – according to NZZ – was returned this week to the top of the finance ministry. The constitutional court declared unconstitutional a parliamentary commission investigating bank privatizations.

In the EU, the power of the markets over democracy is even institutionalized. Under pressure of the creditors, the EU states actually renounced on active finance- and currency policy. They signed the Maastricht treaty that limits the indebtedness and new indebtedness of the states. In addition, a watchdog was created with the European Central Bank (EZB) that barks when a government even thinks of weakening the rights of creditors.

Do the capital markets undermine democracy? This question was hardly ever raised because all criticism of free capital transactions and democracy was regarded as politically incorrect. Therefore responsibility was simply shifted to the governments that do not dare say any unpleasant truths to their voters. Democracy would be good. However the governments do not observe the rules of the game.

In his book “Free Nation Deep in Debt,” US economic historian James Macdonald has now historically illumined and reopened the relation of democracy and the capital markets. He defends the thesis that democracies always arose where the state had to become indebted to its citizens – mostly in order to wage wars. The citizen as creditor is the best citizen. Macdonald shows this with dozens of examples, beginning with Athens, Florence, France and the US.

The times of the citizen-creditor and thus of democracy are past, Macdonald argues. State debts today are held by funds, pension chests, banks and other finance intermediaries. In the US, only 10 percent of treasury notes are still directly in the hands of private citizens. In addition, the creditors have created powerful institutions like the EZB, rating agencies and stock market boards. With a single announcement (expert jargon, downgrading), they can trigger an investor strike and appear as global unions of capital, so to speak.

Professor James K. Galbraith from the University of Texas shares Macdonald’s pessimism. In a book review, he asks: “Can a state be really democratic when it is led by the nose by the banks? How can a democratic will arise when the US has a tax system that spares the most important investors and lays the burden above all on the shoulders of the poor?”

The consequences are obvious. Voters feel that governments can and will no longer enforce the democratic will. They lose faith in politics. In Germany, only 38% of the voters still believe the parties are capable of solving political problems. In France, political problems are increasingly resolved on the streets. A law on dismantling termination protection for young workers was prevented by a national rebellion.


The fraud lies in the system. The servants of the system, above all the bank managers, may believe accumulated capital will benefit everybody. This capital only flows to the bank accounts of a few who lead a comfortable life. Most people who work hard for a meager wage do not have any bank accounts.

J. Balmer, Tafers

The capital markets ruin democracy… Money rules the world!

HZ, St. Gallen

Knowing who are the main creditors in Switzerland and where the interests for the state debts flow would be interesting.

E.H. Landquart

That capital governs and not the “people’s representatives” was always true and will remain true. Not even a strong government or “democracy” will ever change this.

Fritz Walder, Arbon


Democracy is threatened. The global power cartel of creditors has more pull. However the people lose patience when creditors ignore the democratic rules. Rebellions and street battles are not very efficient means for manifesting the people’s will but represent a threatening potential and a counter-power. A collapse of state power and the uncertainty connected with that collapse are very dangerous for creditors because they have much to lose. Therefore the world order must be renegotiated somehow and the balance of power reconfigured.

This process is already underway. The creditors are no longer the same as the former creditors. The credit balances today are in China, Japan and Venezuela. New York and the IMF in Washington are no longer the sole “masters of the universe.” A power struggle is occurring in the cartel of the creditors. The debtors could make hay as the “block-free” once played off the two superpowers, the US and the USSR, against one another.


Claude Beck, Cannes

Report this post as:

Local News

Woolsey Fire: Worst News of 2018? J01 12:18AM

Oppose Environmentally-Harmful Development D10 4:03AM

Oppose Environmentally-Harmful Development D10 3:58AM

OUR HOUSE Grief Support Center Presents Night for Hope O30 5:38PM

Marshall Tuck’s racist dog whistle O27 5:01AM

Marshall Tuck’s ethnocentrism contradicts Californian values O27 4:32AM

Contra Costa-Hawkins O25 3:48AM

Debunking Some Anti-Prop 10 Propaganda O12 6:56AM

Why Should California Choose De Leon Over Feinstein? O10 9:55PM

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

More Local News...

Other/Breaking News



Chemtrails and Prince J20 2:43PM

Wages For Housework J20 2:41PM

Tutelle comportementaliste J20 9:18AM

A Mistake: Jesse Jackson-Toyota deal-in Lexington -Ky is .8 billion over 10 years 2018 J20 1:17AM

If Trump Declares a AantionalEmergency, He'll Be Breaking the Law J20 12:47AM

Jesse Jackson's Sneak Attck on Toyota Lexington Ky and it's workers 2018 J19 9:12PM

Video: Chris Herdges in Eugene, 1 hr 24 min J19 5:37PM



Judge Delays Ruling on Puerto Rico Debt Deal White House Opposes Island's Food Assistance J18 6:04PM



Paraphysique de proxémie guerrière J18 7:59AM


FARCELONA 8.17.2017 J17 3:23PM



PR Debt Cancel, Judge Reviews Cofina Debt J16 9:04PM

Réseautage, fragmentation du capital J16 4:20PM

Paraphysique de manipulation mentale et sociale J15 9:51AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

The Global Justice Project and Human Survival: We're Badly Off Track J15 5:08AM

Markets as a Fetish, Globalization, and Dissent Management J14 1:03PM

State Debts - The Primal German Fear J13 5:09PM

Sans liberté, sans égalité, sans fraternité J13 8:09AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy