imc indymedia

Los Angeles Indymedia : Activist News

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


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN 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

The End of Finance Market Capitalism: Renaissance of Socialism?

by Dierk Hirschel Saturday, May. 02, 2009 at 3:13 AM
mbatko@lycos.com

The crisis offers an historical chance to civilize an unbridled capitalism with reform policy. The future relation of market and state is the focus of attention.. Financial markets are characterized by herd behavior. Risk consciousness disappears.

THE END OF FINANCE MARKET CAPITALISM

Renaissance of Socialism?

By Dierk Hirschel

[This article published in: Neue Gesellschaft, Frankfurter Hefte 4/2009 is translated from the German on the World Wide Web, http://www.frankfurter-hefte.de/Aktuelle-Ausgabe/.]




Some never learn! While German chancellor Merkel in the BILD-newspaper expressed the desire to return to our old course, “to normality after the crisis,” most recognized the failed finance market capitalism could only be overcome through fundamental reforms. The state will play a stronger role in the future. The markets must be regulated socially and ecologically. In addition we need a stronger mix of forms of property and more economic democracy.

The Frankfurt and Munich glass boxes are in flames. The core meltdown threatens the German banking system. The economy is in free fall. In the fall at the latest, the crisis will strike the labor market with full force. Then it will be clear to even the last optimists: we are now living through the worst economic- and financial crisis since the Great Depression.

While the state bailout campaign is going full steam ahead, the causes of the fire are discussed. This is good. A clear analysis of the causes of the crisis is the prerequisite for effective fire prevention in the future. However more is involved. This crisis is not a pure economic crisis. It is also a crisis of the dominant ideology and policy. The crisis offers an historical chance to civilize an unbridled capitalism with reform policy. The future relation of market and state is the focus of attention.

With the crash of Wall Street & Co, the myth of the self-controlled market was demystified. Efficient markets did not survive the praxis test.

On the financial markets, there is neither perfect competition nor equal access to the same information. Market manipulation is given free rein. Financial markets are characterized by herd behavior. Macro-economic malformations arise out of wrong decisions of individual institutional investors. Moreover financial markets are pro-cyclical. In the boom, asset values rise along with potential credit creation. Risk-consciousness disappears in expectation of high profits. Inadequate institutional and personal liability promotes the risk-propensity. Thus speculation bubbles arise again and again. A new and better framework cannot limit this spectacular market failure. Repeating the excesses of the past should be prevented with stronger requirements about internal capital resources, company compensations, incentive systems, better early-warning systems, more personal liability etc. Must we all become law-and-order politicians? Does the social market economy show us a way out of the crisis? Market failure only explains a part of the current crisis. A new framework is important but cannot solve the crisis of the capitalist model of production and consumption. Profit- and assets-income have exploded worldwide in the last decades. Finance market capitalism allowed profits to climb to astronomical heights on the back of dependent employees. Capitalist production relations produce capital surpluses. But the dominant investment of surpluses as money capital is new. Global financial assets amount to 0 trillion, many times the world domestic product. This development did not fall from the sky. Politics paved the way.

The entrepreneurial freedoms of capital market actors were expanded in business law and stock taxes. Unions were weakened through political deregulation and precariousness of the labor market. High incomes and assets are managed for tax purposes. The partial privatization of the social security system and life necessities expanded the investment spectrum of the financial markets. The reverse of the increasing income- and assets concentration were stagnating mass incomes. In Germany the real incomes of employees did not rise even in the upswing. Private consumption cannot move any more. The US loosened this growth brake by organizing the consumption of the lower- and middle-income sectors on credit. In Germany, Japan and China, the response to the choked do0mestic demand was an aggressive export strategy. But the credit-financed US vacuum of the world market no longer functions in the crisis. Those who jumped on the bandwagon have to develop their future domestic markets. If they do not do this, they shrivel.

A strongly domestic oriented model of economics requires more public investments and higher wages. However local wages do not rise through idling. The development of market income is by no means without conditions. The effective power of union wage pay was weakened in the last years after the wrong ways of labor policy. Therefore a new order of the labor market is needed now. The disparity of relative strength on the labor market can be balanced with the help of a legal minimum wage, state promotion of regular employment – with simultaneous discrimination against precarious employment -, reduction of the pressure of paid labor (abolition of intensified exactions). The way would thereby be free for a more dynamic wage- and consumption-development.

SOCIALLY AND ECOLOGICALLY BLIND

The latest development has made clear once again: deregulated markets are socially blind. There is no social form of capital exploitation. What is social in capitalism was always wrestled from it in political conflicts over distribution. Unions and social democracy have made great historical gains in these conflicts. This knowledge must become part of everyday life or the common heritage of political conduct. Recalling the law-and-order foundations of the so-called social market economy leads directly in a cul-de-sac. A brief glance at the rear-view mirror of post-war history illustrates this. Ludwig Erhard wanted to set unions under the antitrust law. He regarded joint-determination as incompatible with the free market and fought against the iron-and-steel joint determination law of 1951. From Ludwig Erhard’s perspective, the 1957 pension reform was the beginning of the end of the social market economy. In short, the law-and-order vision of a social market economy cannot be harmonized with a socially just and ecological reform policy.

One central political challenge of the future consists in the comprehensive welfare state regulation of modern capitalism. The welfare state of the future needs a well-balanced relation of flexibility, social security and retraining. Protection against unlawful dismissal and high non-wage labor costs ensure a minimum of income- and employment-stability. Basic security models must cover the risks of precarious paid labor. The large social security systems must be rebuilt into citizen- or employee-insurance systems.

A modern welfare state relies on prevention. Training and re-education must replace the unimaginative pressure of transfer cuts and intensified exactions. A modern welfare state is involved in a jobs policy. Social services should be developed. A publically-promoted jobs sector is the alternative to passive financing of long-term unemployment. A modern welfare state is also an investing welfare state. Profit- and assets income should be included more strongly to finance the future welfare state.

Unbridled markets are socially and ecologically blind. Capitalism undermines its own foundations of production. If climate change spreads, then a fifty of the global social product will soon be lost. Fallow capital can obviously be diverted in regenerative energy, resource efficiency, energy savings measures and efficiency technologies through an ecologically adjusted reorganization of market-conforming incentive systems. However this alone is not enough. The resistance of the promoters and profiteers of fossil capitalism is too great. Here we need an active state that leads as developer, innovator, investor and customer in the scope of an ecological industrial policy.

PROPERTY QUESTION AND ECONOMIC DEMOCRACY

The current crisis sets the property question on the agenda, first of all only in the case of distressed banks.

Still the state should not appear here as a pure repair shop. The new public owner must control itself and influence corporate policy. The fairy-tale of the state as a bad businessman has had its day. The past privatization- and liberalization-balance is not convincing. A cheap countrywide and top-flight provision with public goods cannot be achieved, much less the development of wages and working conditions of the privatized areas. A functioning competition can hardly be produced with natural monopolies (energy supply, railroad). In what areas private, state, socialized or cooperative property can bring the highest economic and social efficiency must be discussed and decided anew.

But a stronger future state also requires a far-reaching democratization of society. Now is the time to join the strong tradition of economic democracy and develop this conceptually. More economic democracy means more internal and supra-internal joint determination, a democratic self-government of the economy, plural forms of ownership, a better regulation and macro-economic control.

This historic crisis is an historic chance for a social and ecological reform policy. How such a reformed society develops in the long-term and what role the profit logic will play in it is an open process in which it is rewarding to be involved.

RELATED LINKS

www.socialistproject.ca

www.capitalismhitsthefan.com

www.goleft.tv

www.informationclearinghouse.info

www.baselinescenario.com

www.buzzflash.com



Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

Two Podcasts on fbi corruption A06 10:13PM

Fbi assassins assault & try to kill DAVID ATKINS A06 7:29PM

EPA Head Scott Pruitt: Of Cages And Sirens A06 2:15PM

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