- js reader version
- view hidden posts
- tags and related articles
by Mohssen Massarrat
Wednesday, Nov. 19, 2008 at 4:47 AM
Financial jugglers speculating with food, oil and other raw materials caused double-digit inflation and made staple foods like rice and wheat into luxury items for millions. Neoliberalism with one blow managed to drive nation states to the defensive.
RICH OF THE WORLD, ENRICH YOURSELVES!
Neoliberal core meltdown. The financial crisis may not be seen isolated
By Mohssen Massarrat
[This article published in: Freitag 44, 10/30/2008 is translated from the German on the World Wide Web, http://www.freitag.de/2008/44/08440901.php. Mohssen Massarrat is a professor of politics and economics at the University of Osnabrook (Lower Saxony).]
The current financial crisis is the greatest crisis of capitalism since the first world economic crisis 80 years ago. The crisis of capitalism critics is also drastically manifest. Critics all predicted this development but hardly probed the lessons to be drawn from the crisis in the sense of an emancipating policy. Now it is time to make up for what was neglected as fast as possible. The “bailout package” of the European Union governments allows neoliberal capitalism to escape unscathed.
“Enough people are already working on covering up the breakdown of the system as fast as possible with the mantle of forgetting,” said the former Daimler head Edzard Reuter (Frankfurter Rundschau, October 18/19, 2008). The fact that Angela Merkel nominated Hans Tietmeyer, one of the architects of neoliberalism in Germany, as coordinator of the bailout package, and then – after criticism in the German parliament – nominated another hardened neoliberal Jorg Asmussen, proves neoiliberals have all power and all the reins and sacrifice pawns to save the system. The “greed” of several managers is responsible for all this. With means like a salary cap for managers, the sting should be taken from the rage of the population. On all television channels, the “greed” of managers is the theme. Greed is simply an unchangeable human constant. Therefore no alternative to neoliberalism is possible.
Against this diversionary campaign, critics must offer a crystal-clear analysis of the driving forces of the current crisis. Is this a crisis of finance-driven capitalism or has the financial system fallen into crisis? This system is an existential component of neoliberalism that replaced Keynesianism at the beginning of the 1970s. All evidence points to the latter.
VENTURING MORE CAPITALISM
Neoliberalism is the cause of growing global poverty and mass unemployment, not only of the financial crisis. Neoliberalism is a political strategy of millionaires and billionaires, big shareholders, big speculators and top managers in corporate boardrooms, banks and rotten capitalists who prefer increasing their capital through wage cuts and social cuts than becoming fit for competition through more imagination, diligence and creativity.
Neoliberalism spreads like a cancer and marginalizes parts of the middle class in all national economies. In alliance with influential politicians and their propagandists in the media, neoliberals channel their people in important institutions like the IMF, the World Bank, the WTO and the central banks. They gained their projects with the blessings of neoliberal economists and an academic tinge. Wealth in super-abundance, the enormous power potentials in national and international institutions and the media owed to a powerful lobbyism and a powerless democracy formed the backbone of this strategy.
At the beginning of the 1970s, the neoliberals regarded their hour to strike as come after Keynesians failed to modernize Keynes ecologically and socially to creatively react to stagnation and inflation (stagflation) of that time with investment programs in the environment, education, health care and gradual reduction in working hours. The neoliberal mind knew how to brilliantly exploit the vacuum. It seized positive values of the 68-movement like individual freedom and self-determination, mixed them with greed and egoism to a success philosophy whose goal consisted in making neoliberal theory with the four pillars (liberalization, flexibility, deregulation and privatization) capable of a political majority. For legitimation, the little mantle “reform” was hung on all these projects. In a manipulative intention, they declared “financial reform,” “labor market reform” and so on were future-oriented.
With radical liberalization, neoliberals urged unrestricted competition through retreat of the state from the economy. Now they shamefully urge the state to block job programs and subject politics, governments and parliaments to the creed “venture more capitalism” (Friedrich Metz)…
“There is no left or right, only a modern economic policy,” Gerhard Schroeder wrote on the banner of the SPD. The SPD’s change to the middle reflected the triumphant advance of neoliberalism. With the compliant help of the nouveaux riches “left,” the welfare state was destroyed. The result was Agenda 2010 in which Red-Green created the fundamentals for the low-wage sector (over eight million workers today) and degradation of the unemployed through the Hartz IV system (combining unemployment benefits and income support and drastically reducing the duration of benefits).
BETTER THAN NO JOB
With growing unemployment and fear over jobs, the Red-Green coalition’s argument prevailed that more flexibility and mobility of labor is an important prerequisite for more growth and reduced unemployment. Flexibility of the labor market is the second pillar of the neoliberal strategy. The results were one-euro-jobs and dumping wages (“a poorly paid job is better than no job”). More intensely than in the past, wage earners were forced to submit to the interests of capital and accept increasing cuts to the social rights of employees.
The deregulation of capital- and financial markets – the third pillar of neoliberalism forced worldwide by the IMF – the central committee of international neoliberalism (with extortionate methods in the South) – occurred at a time when hundreds of billions of surplus petrodollars of OPEC-states and the capital surpluses of multinational corporations earmarked from the real economy branched off and sought profitable investments. These streams of money capital driven by deregulation and abandonment of fixed rates of exchange suddenly changed the structure and rules of the game of the international financial system. The financial streams separated from the real streams of goods and services.
Partly virtual money markets arose with daily sales of many billions of dollars. These money markets were accompanied by financial- and rating agencies that dragged in banks, pension funds and companies like Siemens, Volkswagen and others in the incredible suction of a dream world of financial speculation with many financial bubbles – with complex inscrutable financial products like hedge funds, derivatives and certificates. Social earthquakes were produced in Mexico, Argentina, Indonesia and also Russia. The culminating point was the real estate bubble in the US from the middle of 2007 that drove millions into homelessness and the neoliberal international financial system to crash. Financial jugglers speculating with foods, oil and other raw materials caused double-digit inflation rates and made staple foods like rice and wheat into luxury items for millions of people in Asia and Africa suffering hunger.
The widespread public indebtedness of many states caused by falling taxes for entrepreneurs and the rich led to massive pressure on governments to privatize public services like the post office, railroad, telecommunications, energy- and water supply, educational- and health institutions and essentials. This privatization is the fourth pillar of neoliberalism. Thus new investment spheres were created for surplus capital.
THE TIME IS RIPE
The ridiculous profits of 25 percent and more realized with short-lived international financial transactions were very disastrous for the real economy. Capital circulation was unnecessarily accelerated through higher capital turnover numbers. Rationalization pressure increased and jobs were destroyed. Business associations and politicians supplied ethically unscrupulous arguments to carry out massive cost reductions on the wage side, destroy welfare systems, outsource and transfer jobs to low-wage regions, extend working hours and raise the pension age. Soaring profits as a result of falling wages as in Germany led additional capital surpluses to be withdrawn from the real economy and pumped into the financial sector.
Neoliberal capitalism came full circle with liberalization of the economy, deregulation of financial streams, privatization of public goods and flexibility of labor markets on one side and redistribution from bottom to the top on the other side. Through skillful instrumentalization of globalization, neoliberalism with one blow managed to drive nation states, unions and leftist parties politically to the defensive, challenge social gains of the labor movement and rope in conservative and liberal parties worldwide for enforcement of its redistribution strategy. Neoliberalism developed into a communication key, an effective code with the message: Rich of the world, enrich yourselves! The poor will also be better off when they become richer! Therefore political elites’ attempt to feign a turn through bailout measures should be prevented.
This enlightenment can only succeed when neoliberalism as a whole moves into the foreground of social-political discussion. A broad anti-neoliberal political alliance of social movements – from Attac and the unions to liberals and social democrats – is necessary to affect the middle class marked by neoliberalism. A spanner can be thrown in the works of financial jugglers by annulling all new laws for deregulating the financial streams and prohibiting new financial products. The tax havens must also be closed and privatization of all public goods revoked.
The time is ripe for a counter-movement for a fair distribution of work through reduced working hours, an income securing existence without degrading controls and a legal minimum wage. These goals that disappeared for decades behind the neoliberal veil should now be set on the political agenda.
Mohssen Massarrat. Born in Iran, is an emeritus professor for political science at the University of Osnabrook (Lower Saxony). Active for years in the peace movement, Mohssen Massarrat has published many books on international economic relations, ecological questions, the Middle East, and peace- and conflict research.
Report this post as:
LATEST COMMENTS ABOUT THIS ARTICLE
Listed below are the 10 latest comments of 1 posted about this article.
These comments are anonymously submitted by the website visitors.
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...
Architect Stephen Francis Jones
UN Forum Wrestles with Economic Policies 10 Years After Financial Crisis Islands Call for
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
More Breaking News...