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[Opinion] Democracy's Downfall
What are the results of privileging bankers over citizens?
Michael Werbowski (minou)     Print Article 
Published 2010-05-18 16:09 (KST)   
The great German sociologist, scholar, and politician Sir Ralf Darendorf was a true believer in "Classical Liberalism" or as he put it once, in an interview (Conversations with History: Sir Ralf Darendorf, UC Television), he championed the concept of "individual life chances," for everyone. Yet in the post-modern, post-industrialized world we live in today, these "chances" are increasingly limited to the favored few or the financial elite.

The proof is in the Wall-Street clique, which has in the name of "too big to fail" taken the rest of the U.S economy (and by extension the European economy as well), hostage and has demanded ransom in the form of a trillion dollar taxpayer funded "bail out." This elite run, extortionist racket has effectively brought down the entire world financial system.

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Repudiating the "Liberal agenda" of the 1980s

Darendorf who lived through the horrors of Hitler's regime with his family, his father was a traditional Social- Democrat and was persecuted by the Nazi party, saw himself as a "Liberal." Never the less, he always adhered to the idea of favoring social reform and a strong "welfare state", or as he remarked,
"providing more opportunities for the wider group of people."

Yet he has during this political life placed more emphasis on "individual life chances."

But as well he always believed that, "...social order or social structure has to offer a combination of a breadth of opportunities and a sense of citizenship for all." Or as he put it once,"a combination of access by citizenship and of wide choices," must exist for our western democracies to thrive and survive.

Margaret Thatcher and Ronald Reagan, two stalwarts who personified laissez-faire capitalism, or an economic model which exemplified the 1980s, had other ideas. For them this period in history was, "characterized by an attempt on the part of some leading politicians, to extend the range of choices for those who can make it ... Never mind the citizenship rights of everybody ... So they have encouraged a 'new Darwinism' ... A new struggle for survival, of each against everybody ... and a sort of 'casino capitalism' [sic]... which we have seen in this decade [ the1980s]," as Darendorf observed.

This era led to the erosion of the citizen's rights and saw the enhancement of corporate power over the average American and European.

"This decade has forgotten the need to make sure that every human being in our societies has to be a citizen with full access to economic social and political opportunities," Darendorf remarked in that 1989 interview.

A visionary of sorts he also was a proponent of strong international bodies which would keep multinational firms, (and I am assuming he was referring to the "too big to fail" mega-banks as well) in check. He advocated re-enforced world order, which would one day impose as he said, "international constraints on the actions of companies."

Yet today no such cross-border restraint mechanism exists. The financial reforms being proposed on Capital Hill, if they ever pass into law, may be the first step towards much wider and more stringent restrictions, being imposed on banking institutions world-wide.

Is Greece in 2010 like East Germany or Poland was in 1989?

Somewhat like the liberal minded scholar, a fellow German compatriot Alfred Herrhausen who, officially, was assassinated by the notorious R.A.F. (Red Army Faction) terrorist group in late 1989. Although he was a banker and financier, he also cautioned on the excesses of adopting unbounded or unchecked capitalism in, at the time, neighboring East Germany.

He advocated a more gradualist approach to grafting neo-liberal and free-market policies on a formally state run economy which existed in the former communist country. Moreover, the head of Deutsche Bank was not enthused, like some of his contemporaries, by the idea of a quick and snappy re-unification. Herrhausen favored a festina lente (or haste slowly) approach and seemed to advocate a citizens' consultation on the issue of a united Germany. There was of course no popular consultation or referendum on German reunification.

A man of vision falls victim to an assasination plot

The Deutsche Bank president was to deliver a a speech of which key parts were oddly omitted by the print media to the" American Council on Germany" (Dec 4th,1989) in New York . Let's keep in mind the timing of the address: as Europe was experiencing the upheavals and social transformations incurred by the fall of the Berlin Wall.

We are experiencing similar social turmoil today.

In this eminent banker's mind a "gradualist" approach was needed rather than the "shock therapy" treatment proscribed by leading neo-liberal practitioners such as Dr. Jeffrey Sachs, who sought to expand capitalism eastward in an expedited fashion, regardless of the "social costs" such policies might entail on the citizenry.

Eventually and unfortunately after Herrhausen's assination the more radical approach to reforming the former Communist bloc states prevailed.

Here is part of his prepared remarks:
"Of course, the process transforming a socialist society into a capitalistic one could and should be managed in stages and it should be closely coordinated with price and currency reform. Price, currency and property reform would mean profound changes throughout society in Eastern Germany. Many people in the East, including some of the leaders or the present opposition groups, are already worried about the social costs of such adjustment. The rewards would certainly nor accrue instantaneously."

Furthermore, the German banker was concerned about the "social cost", his East German fellow countrymen and women would have to pay for drastic and rapidly applied pro-market reforms being implemented, such as wage and spending cuts and massive lay-offs in the public sector and large scale privatisations of state owned sectors. We still see this today.

In his view, a "go-slow" approach, which would cushion the blow of rapid and radical reform on the populace targeted by these measures, would be more appropriate and democratic in nature. Herrhausen was reluctant to see German reunification "fast -tracked" or happen "overnight."

He tended to favor a moderate pace of social, political and economic reform instead. "... I am convinced that, given an adequate economic environment in the East and pertinent support by the West, the East German as well as the other Eastern economies could achieve impressive growth. I believe [East Germany] in particular could then catch up on the western standard of living in about ten years or so." he wrote in his never-delivered speech.

He also favored debt reduction in highly indebted states as the such as in Poland at the time ( or the "Third World" today.) A very controversial view at the time. He wrote: "If there is to be a permanent solution [to the debt issue], this will require enlarging the strategies hitherto adopted to include a reduction of debt or debt service."

All of these recommendations made perfect sense then and still do now. Yet his proposals were not very popular among his peers as they meant less lending and inevitably less profit for the banks and their CEOs. Which brings me, finally, to Greece's current plight. The country is facing default on its debt as did Argentina in 2001. But its fate and well-being is now totally beholden to the directives of the IFI's ( International Financial Institutions) just like East Germany and Poland were back in 1989. Athens' "sovereign debt" is being taken over by globalized bankers and the country's future is being steered by a handful of International Monetary Fund technocrats.

The Greek people will suffer as did the Poles and East Germans. Sky-rocketing prices and unemployment, right- and left-wing extremism are likely to occur, and the entire nation will be at the mercy of their foreign creditors for decades to come, as the Greeks' standards of living falls, as fast as the neo-liberal dictates are applied on them.

The ideas and socially progressive ideals espoused by Sir Ralf Darendorf and Alfred Herrhausen which privileged the citizenry, over the global banking elite need to be recalled more than ever in these times or else our democracies will fail just like the investment banks of Lehman Brothers and Bear Stearns did.
This article appeared on Digital Journal
©2010 OhmyNews
Other articles by reporter Michael Werbowski

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