THE CRISIS AND THE LEFT: DEMOCRATIZING INSTERAD OF PRIVATIZING

By Carlos Hanimann

[This article published in the Swiss WoZ-Die Wochenzeitung, 2/19/2009 is translated from the German on the World Wide Web, http://www.woz.ch/]

How much democracy does the economy need? What would an economic democracy look like?

Times change and the Christian-Democratic Party (CVP) recently changed its opinion. The party did this over the weekend when it distanced itself from unbridled neoliberalism and urged reflection on old values like honesty, modesty and respect. Neoliberalism has no future. This insight is now even accepted by the Christian-Democratic Party.

In the last years, neoliberalism conquered the hearts and minds of humankind; it was total. In this regard, this unfettered form of capitalism was logical and consistent. It relied on the privatization of all areas that could be privatized without regard to losses. This system could be called neoliberalism, casino capitalism or finance capitalism 2.0. It has been bankrupt since the fall of 2008 when it suspended democracy in a last prank or practical joke and financialized a whole country. The democracy question was raised more than ever for democrats in the economic crisis since UBS (mammoth Swiss bank) was bailed out on October 16, 2008 with the emergency law (and many banks enjoyed an implicit state guarantee).

THE DEMOCRATIC RITUAL

“Since time immemorial, (neo-) liberals have wanted as little democracy as possible as an unavoidable evil that should not get in the way of the real kingdom of freedom the capitalist market economy,” writes Michael Kratke, professor of political economy at Lancaster and WoZ author. In the neoliberal age, the “holy separation” of politics and the economy is in effect. “As long as the economy is not democratized, democracy remains incomplete, unfinished and always in danger of being trivialized to mere ritual.” In the last months, leftist circles increasingly urged democratization of the economy. Can you imagine an economic democracy in which politics and the economy are not removed from each other? This question is urgent given the state bank bailouts, nationalizations and economic programs.

The economy stops being a private affair. The answer to the privatization wave of neoliberalism, Willy Spieler editor of the Swiss Neue Wege said, would be “democratization of all areas that can be democratized.” Democracy must be reinvented; it becomes more complex and diverse. Democracy requires more participation of citizens. The question of responsibility is also changed because citizens jointly determine the overall direction and details of economic policy. As Michael Kratke explains, this does not mean everything will be better: “Collective decisions like individual decisions can lead astray.”

RESCUING INTERVENTION WAR

Can financial markets be democratically controlled? A glance at the financial market outlook raises doubts. What institutions could monitor the markets? Could existing institutions like the UN, the WTO or the IMF monitor the markets? Are new institutions needed? Must banks be nationalized in an economic democracy?

In an article, Hans Schappi makes an interesting point. He criticizes the many costly state programs to control the crisis. “Today’s Keynesian bailout programs subsidizing and maintaining an oversized parasitic financial structure will intensify the crisis.” The result will be the next speculative bubble requiring “War Keynesianism” or another intervention war as a rescue. This prospect is reason enough for the left to carefully scrutinize state bailout measures.