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How Does Justice Come to the Economy?
In two 2010 addresses, Johannes Mosmann explains how Milton Friedman's dehumanizing view of the person led to the myth of the invisible hand. Friedman assumed that maximizing personal gain was the only economic motive and that nothing can be known of the interests and needs of others. Friedman's understanding based on the autistic person is in opposition to the understanding of the person as social, interconnected, mysterious and interested in world betterment.
In truth, individuals have economic power in an associative or solidarity economics. The invisible hand that insists satisfying private interests lead to realizing the public interest proves to be a destructive myth that leads to exploding inequality, generalized insecurity, environmental destruction and atrophy of the public spirit. The social drive could be encouraged instead of the ego drive.
HOW DOES JUSTICE COME TO THE ECONOMY?
By Johannes Mosmann
[This address from 11/30/2010 at the GLS bank Christmas meeting of the “Fair and Regional Charter” is translated abridged from the German on the Internet, http://www.fair-regional.de,]
Ladies and Gentlemen,
I was invited to speak about the question what justice in economic life can mean, what the word “fair” implies when we speak of “fair trade” or the “Fair and Regional” initiative. This is obviously a vast theme that I can only outline in the half hour allotted. What is fair in fair trade? Different answers are possible here. The end-consumer in the West must pay the producer in the third world more, One could think of the little community where agriculture is carried out through contributions of coop members. One could focus more on what happens in the value-creation chain before the product reaches the customer, that is what happens between producer, processor and trader.
Many ways are now tested to bring more justice and fairness into our cooperative life. Everything bad and cruel that our age inflicts doesn’t need to be denied to proclaim on the other side that our age also brings a hope that is not yet. This hope is something new. Obviously there have been many idealists with sublime ideas before us. Comprehensive drafts of society were dreamt up by individual minds and then introduced somehow. Individual heads believed they had the perfect idea for the life together of all people and tried to promote this idea in reality. An idea simply extrapolated from a head into reality is a foreign body for this reality, something stiff, rigid and inflexible that cannot be digested by the living process of social life. Thus an idea becomes a tyranny for life. For that reason the great social utopias from socialism to neoliberalism must become tyrannies for people.
Something else is involved with the movement for solidarity economics. There people are clear that they have an inner life, an intellectual or spiritual life and that this intellectual or spiritual life is very different from the outward reality of the present social process. The self with its ideals is on one side and the social life in its present form is on the other side. The two do not agree. In this movement for solidarity economics, people become active who do not react to the contradiction between their ideals and outward conditions in urging a super-idea as a law from some world summit forcing all persons to become ideal persons. Far-sighted persons set out in the movement for solidarity economics. These people feel they are part of this outward life and do not only live in their inner life. I have to move in this outer world. Moreover I violate my ideals… When I buy something, I pay a value-added tax and the taxes are then spend for the war in Afghanistan or for bailing out speculators. Since one cannot be other than in this world and moving in it, one must answer the question very differently about doing justice to the ideal in oneself…
With every social initiative, with every social organization and every institution of social life, one must work against the force of gravity of one’s institution and endure this tension.
Therefore returning again and again, going inward again and again and visualizing the ideal from which one starts is essential for a social project. One has to go beyond and submerge. One must return to oneself and make clear one’s goal. So I understand my task, to give a little impulse so you can desist in the next hour from concrete everyday work and envision the ideal of justice. What does justice in economic life mean? What is fair trade? I must admit something is wrong about the question. A very funny feeling creeps over me… The fact that there is something like Fair Trade reveals the whole decadence of our way of life. Fair Trade casts a light on the state of this economic life by the absurdity that economic life should be made fair… Even if Fair Trade may not be a future-friendly model for the economy, it makes clear what must change in the future.
Regarding fundamental principles of the economy, the economy is based on people exchanging services with one another. This service exchange is absolute in the modern division of labor economy since every person completely depends on other persons producing completely depends on other persons producing vital things and can hardly survive from his or her own work. If the economy has its own principle, it is altruism not egoism. I turn the question upside down. I don’t ask first how justice comes into the economy. I ask: how does injustice come into the economy? How is egoism possible? I have pursued this question in the last years.
The causes of injustice lie in the legal life and cultural life, not only in the economic life. How is it possible that the farmer in Ethiopia is given 1 euro as a daily salary for coffee while he must buy the kilo of millet seed to feed his family for 1.30 euro and thus live like an animal so we can sit around in our luxury furniture and sip coffee. On a legal plane, an inequality arises that one has state authority on one’s die and the other is opposed by state authority. The hierarchy oi power is involved. Inequality before the law is ensured through the ownership law imported from Roman patriarchy and transferred to Africa… Ethiopia needs aids supplies and knowledge technology from the West. Flowers, grains, coffee and so forth are now cultivated everywhere in Ethiopia for Germans, Saudis and Israelis. Ethiopians are held as slaves.
One can only answer the question about the cause of injustice when all 3 areas of human life are considered… The conditions for a fair trade have to be sought in the legal and cultural areas, not only in the economic sphere. For example, these conditions depend on the land being used for grain and not taken away…
Like development in the legal realm, fairness in the economy depends on development in the cultural sphere. “Fair and regional” is ultimately based on people appropriating a certain view of the person beginning to be interested in other people and beginning to be interested in the relation of humans and nature. Thus fair trade is dependent on the cultural area and on the education question. People must be educated so they have an interest in each other. They can develop an understanding for the special needs, abilities and inclinations of others to make justice possible in the economic area. The hurdles we have to surmount in education are in no way less than the hurdles in economics or in the legal realm. Since education is not free or unliberated, education is ruled by the powers that carry ou9t injustice. People cannot freely research or be freely educated because education is dependent on state- and economic power… We may not indulge in illusions any more: the educational system is largely in the hand of markets that are hardly interested in justice and fairness…
The economy may not be seen unfiltered. Rather we see it in the way it was instilled through the educational system. It was instilled in us with a very specific picture of the economy. That is the picture of the Homo Oeconomicus, the person who thinks firstly only of himself, who is not interested in his fellow-persons and secondly can know nothing of his fellow-persons since he is completely cut off from them. He only knows the price of the commodity but knows nothing about how this price came about or about the people who produced the good. That is a picture of our economic perception. For that reason our perceptions are deeply unscientific. The Homo Oeconomicus has its origin in theology; it is connected with a certain simple piety, with the idea that a person cannot claim to know too much because life is ultimately guided by God’s invisible hand.
The autistic person who only focuses on himself gains as much as possible, gives as little as possible and wants to know nothing of his fellow-persons was made the cornerstone of our society. Perhaps you know the foundingthers of the social market economy, Franz Bohm, Alexander Rustow, Walter Eucken and others were also the founders of neoliberalism. The originators of the social market economy were identical with the founders of neoliberalism. I know neoliberalism is mostly confused with American imperialism or American neo-conservatism. However that is only an example of how neoliberals have completely succeeded in dominating human thinking.
I have grappled in detail with the writings of neoliberal theoreticians who established the social market economy that all the parties had to acept if they did not want to be stamped as enemies of the constitution. First of all, neoliberalism starts from the impossibility that the participants of the economy can know anything about one another. Therefore it faces the question: how can order come into chaos when no one can know anything of the others? Earlier the father of the family could see who needed what, who had what abilities and whether it was better for everyone’s well being whether the son chopped wood or grew wheat. In the world economy, everyone depends on everyone being in the right place and the right amount of goods produced. However the economy has become a great network that no one can survey anymore. The neoliberal thesis is that an ordering system is needed to replace the judgment of the family father. People can know nothing of each other. Walter Eucken devised the right system for them so the economy does not become chaos. Thus the social market economy arose and neoliberal think tanks built all over the world starting from Germany drummed the idea of the perfect economic system into heads. Now it has become a chaos. In 2012 approximately 30 million had to die an excruciating death from starvation, even people who had worked for the world market. Why? People did not want to know anything of one another…
What must be known to judge the economic process rightly and know the right measures today for our well-being tomorrow? Every day what the farmer needs for life changes. The price structure changes continuously because it depends in a dynamic way on genuine life on what the farmer needs today and will need tomorrow. It also depends on whether the soil quality will be better or worse. The price that the farmer must receive for his grain depends on many factors that only the farmer can know. How can I know this?… I must slip into the role of merchant because the merchant knows what he can sell at what price… Ultimately I must slip into the role of consumer to know what the consumer wants, what he needs and whether he can have it at that price.
To make a true statement about the economic process, I must leave my own skin. A total knowledge of the economic process necessitates leaving my own skin and putting myself in all people involved in the value-creation…
Still the economy is not a private car but a living process that moves and shifts as the expert knowledge of individual persons interact and this expert knowledge meets the needs of individual persons who are living and nature which is also living. This is something fluctuating and dynamic. To guide this, one must feel what every individual feels, observe what everyone sees and what everyone wants. Because this is impossible, I realized after long reflection I cannot dream up the best economic system…
In reality one can create the possibility that the expert knowledge is carried out, that the many limited judgments can combine and be communicated so what is practically possible out of the collaborator of individual judgments becomes concrete. As a result, one stops being a Homo Oeconomicus and begins to see the abilities and needs of his fellow-persons. That is the consequence as soon as one refuses to hit his head against the wall, that one abolishes the Homo Oeconomicus and realizes the possibility of a mutual perception. The consequence is that one annuls the Homo Oeconomicus by being interested in others… The grain prices rise or hit the roof. The actual costs of agricultural production must be the starting point and a middle way found between the interests of farmers and the interests of retailer5s and workers found so all the concerned can live. They dialogue with one another and begin to be interested in others. So one can tackle reality and approach the ideal of justice or fairness.
As soon as the prejudice of Homo Oeconomicus is abolished, all theories are also annulled since there will be nothing to theorize any more. Then the superstition of the invisible hand that guides our fate and even marks the Greens-party program gradually loses its appeal. How can this mutual perception become more practical?… Not all the participants in the value-creation chain are at the table. For example, I do not sit at your table although I am part of the value-creation chain. I am part of the value-creation chain. I am one of your customers….
Now Christmas is here and people run about with the idea of brotherliness in their heads. Settled in heads, brotherliness hardly becomes concrete or takes root. Brotherliness cannot be present ideally. It can only be present when realities are created where people who share in the value-creation see one another. If they cannot see, they have no other choice than to act selfishly. Therefore your initiative is so important. It creates the possibility of being unselfish. A reality simply opposes the ideology… We must represent equality before the law and freedom in the spirit really and not only as ideas. The name of the institute is Institute for Social Three-Member Diversity (Dreigliederung). Perhaps we could talk about that…
THE NEOLIBERAL DIALECTIC AND THE ANTHROPOSOPHIC ECONOMIC MODEL
By Johannes Mosmann
[This public address from 3/4/2010 in Sinnewerk, Berlin is translated from the German on the Internet, http://www.dreigliederung.de/essays/2010-03-001.html.]
Ladies and Gentlemen,
In 2009 I attended a congress at the TU (Technical University) called a “McPlanet.” The motto was “Game Over – New Start!” Our economic system ended with the financial crisis. Now we are ringing in a new era. At the beginning of 2009 many believed the financial crisis had to lead to a total breakdown of our capitalist economic system. In this expectation, 1700 young persons came together from all over Germany at the TU Berlin for answers to the questions what is necessary for a new start, where can we begin and what can we do from representatives of diverse NGOs and Gos as for example Heinrich Boll foundation, attac, Greenpeace, FIAN and others.
For two days there were presentations and discussions. On the evening of the 3rd day, the plenary from the most represented organization announced the common conclusion. Hundreds of people, mostly youth, stared spellbound at the way ahead. Then the idea for the new start appeared: politicians should finally do something!
Imagine 1700 youths with fresh spirit, full of energy and hope who make redundant our civil rights activists: those above should do something! Every hope, every impulse and every possibility for tackling and transforming social life was nipped in the bud.
What was wrong there? What mentality was manifest? How can this consciousness be characterized?
The organizers of the congress were surprised by the people who came to the congress. That was a surprise. They did not expect actors of the social life. People were not included with their social plans for people. They dreamt up plans for people in which the people could not found did not appear!
What do these “social” organizations expect when they do not include people?… One hears the same everywhere, everyone thinks the same whether left or right, whether materialists or anthroposophs. What makes the answers so monotonous and what underlines the synchronization or enforced political conformity is the real crisis and the real catastrophe. Consider the following demands:
“With a special tax, massive funds could overcome the consequences of crises and future-friendly reconstruction of our society… Tax havens must be dried up and hedge funds and highly speculative financial products prohibited. Banks are service providers of society and should be under consistent public control. AQ financial transactions tax could check speculation and finance the consequences of crises. The casino must be closed… The international Monetary Fund (IMF) and the World Bank must be democratized and their programs oriented to social-ecological criteria. Crisis management and re-regulation of the world economy should be discussed in the framework of the United Nations…
Export-subsidies of industrial countries should be abolished and speculation with food prevented. Trade with agricultural goods must be regulated outside the World Trade Organization. We demand food sovereignty instead of businesses with hunger!”
Do you see? All this hangs in the air! Who is the subject? What does this mean – this should be abolished? Who abolishes and who is the subject?… A petitioner abolishes nothing. Attendees of the meeting abolish nothing. All socialism is exhausted in dreaming up what someone else can do. One has excellent ideas for others but not a single idea for oneself. No demands are made on oneself. The notion that one could be an actor of social life and have something to do with the financial crisis is repressed.
What is a subject? Who is the other who should act in our place? The subject is some kind of central organ, the state, the IMF or the UN. This central organ should prohibit something, pass regulation and coerce people. That is clear. When people are not included, people are forced and controlled from the outside by some super-authority. Every socialization measure that is dreamt up ultimately amounts to a person being demanded and forced by a central organ… The state should help the starving person, the state should democratize the bank, the state should take away speculators’ money, the state should give us a basic income, the state should provide us with work, the state should fully finance our schools, the state, the state, the state. This state must be omnipotent. The state is God; the state is an idol.
Perhaps you know how the modern state arose, how it understood itself as God’s representative on earth and how it fought with God’s other great representative, the Catholic Church. As the state was Christian, the Catholic church conversely was state-like. They could not both hold out in some phases of their development since state representatives hired the priests and the priests collected the taxes. The territorial state emerged as victor from the battle between two religious-state hermaphrodites. Up to today it still retains something of its spiritual appearance, the aura of the sacred. Letting the state educate his children is hardly incredible to a person as well as surrendering the education of their souls to the hands of the state. The state forms those souls according to its image. The whole disobedience of the children of the state consists in giving a quick prayer to the dear state as occurred at McPlanet 2009. We turn imploringly to Father State and ask to be heard because the state-God rules, orders and creates peace and justice. That is the belief in the state on one side.
Belief in the economy, on the other side, is a little different. The publication of the book “Wealth of Nations” of a famous theologian is commonly considered the birth-hour of the national economy. This famous theologian and moral philosopher was Adam Smith. Adam Smith sought God behind the bustling activity of humans, behind a drive and behind egoism, not in the state. You know this. Smith assumed the well-being of everyone is greatest when everyone indulges his egoism uninhibitedly. However when a person intends to do something good to another, he would actually do something less good. The theologian explanation is that God works in the person when he surrenders his selfish drive. A metaphor for this work of God has become famous in this connection: an invisible hand, Smith said, increases the happiness of everyone in the moment when the individual only thinks of himself.
That is the core of classical economics. The dear God appears to economic theologians differently than to state theologians. God is more a fate-God, a nature-God…
In the “social sciences,” the person acting consciously is ignored. The person is imagined as a puppet hanging by a thread, a remote-controlled unconscious thing. But what if that is not the reality? What if there is no one at the other end of the thread pulling and guiding us into life? What if we guide ourselves, if we have the reins in our hand but don’t know this since we believe in the heavenly helmsman behind us? Then the hypothesis of the invisible hand leads into chaos. I think that is happening at the moment…
People obsessively project the dear God everywhere: an invisible hand, the economy, “the law” or some representative on earth like the UN that brings life… Gerhard Schroeder once said the economy is to blame for unemployment… The dear God has done this. The German chancellor even said, the dear God is to blame. This happens in the 21st century…
The word liberalism is obviously included in the word neoliberalism. Liberalism is the ideology to which Adam Smith was devoted. Adam Smith did not invent this liberalism. He described how people actually behaved in the England of his time and what faith was expressed in their thoughtless actions… The dominant ideology today that has become a world ideology comes from the German language area: neoliberalism. Neoliberalism is something German; neoliberalism is the German export-hit. Americans adopted it but it originates from Germany.
Neoliberalism arose at the beginning of the 20th century in Germany and Austria and demonstrated at that time that the invisible hand of the economic God carried out an evil game with people. Unemployment, hunger and mass impoverishment were obviously intended by the economic God. Therefore some liberals in Austria and Germany turned to the other God, the state-God. A social science developed in which thinking was thrown here and there between the two pictures of God and driven in a dialectic between economy and state. On one hand, people believed egoism promotes the general interest. On the other hand, people believed the state must lay down certain rules. In both the Freiburg school and the so-called Austrian school, different mixed forms of the two idols were attempted, between the state and the blind economy. These mixed forms were called the “third way.”
The showpiece model of neoliberalism is the social market economy in Germany… Alexander Rustow coined the term “neoliberalism.” Rustow understood himself and neoliberalism as a “liberfal criticism of liberalism.” He wrote a book titled “The Religion of the Market Economy”… According to Rustow, the state must regulate the economy! That is neoliberalism! On one side is the free play of the market and on the other side the regulating state… Liberalism desires little state because it presumes a magical socialization power in egoism while Marxism emphasizes much state because it sees throu9gh the specter in this relation. The intermediate form between these extremes is neoliberalism. There are different varieties within neoliberalism with finer points around the kind of regulation, the kind of tax as for example the Tobin tax and so forth…
The demand that the financial market should be regulated is a neoliberal position!…
Consciousness must come from the outside since making profits depends on knowing nothing of the consequences of actions and that actions have terrible consequences. There must be a monitoring from the state side. The state must regulate from the outside to make the economy and justice possible since the economy depends on ignorance.
This is the logic in which we are all caught. We all start from an assumption… and remain captive in neoliberalism… This thesis is made into an economic law when the thesis that the economy only knows egoism is reinforced. This thesis is made the untested assumption for all thinking about the social. The focus of inflammation is in the social organism. That is the origin of egoism in the economy! That is the great ideology at the beginniing of all social evil of the present!…
I read Milton Friedman. When you read him, a view of the person seems projected by our economics. In Friedman’s thinking, human consciousness seems like the atom…. Social life is brought about by the collision of encapsulated humans enclosed in themselves. These human-atoms only know what they want to have and what they can give. This is all the person needs in consciousness, according to Milton Friedman. Why something is expensive, what happens in the factories, what are the needs of workers, how conditions of production change and so forth do not need to interest anyone. One only needs to know it is expensive. All of these atoms whirring around is not a chaos because these atoms are ruled by a natural law. This law ruling people from the outside is the market mechanism,t he invisible hand.
You can see in Milton Friedman that neo-liberal thinking is never really thought out… We should stop polemicizing against neoliberalism and look at this neolioberalism in an unbiased way to know where its errors are.
Firstly, a person cannot know anything. This is the first hypothesis. Therefore one seeks an invisible hand. Then the invisible hand is justified so that a person doesn’t need to know anything thanks to this invisible hand. Suddenly it becomes a doctrine of salvation! Finally the question how the invisible hand functions is answered: a person cannot know anything if the invisible hand is to function. This turns the world upside down. A coercion comes out of the hypothesis. At least Milton Friedman is not inconsistent. He demands state protection of ignorance. The state should ensure no one can know anything through monopoly laws, bank secrecy and the like. From the hypothesis of ignorance, knowledge can be prevented with force to test the utopia of the invisible hand. Without ignorance, one could not hope for the grace of an invisible hand That is economic policy: create space for the imaginary invisible hand by cutting off the connections between people. The state ensures people can know nothing of one another.
Economic theologians describe the invisible hand as a mechanism, a “market mechanism.” What characterizes this mechanism, this natural law? First, a good becomes scarce and there is no longer enough for everyone. Those who can afford it offer more for the good to guarantee their provision. The producer can take more for his product. Prices can increase because there are enough people who buy it. The possibility of higher prices awakens the greed of other people. They begin to produce the same good in expectation of high profits. This leads to increased production. The product then becomes cheaper. Some time or other a balance occurs between supply and demand. That is the theory of the machine.
To keep the machine running, we have politicians. That is the job of politicians that we expect from them. They should increase the “purchasing power” of the poor man through tax cuts, prevent price agreements, promote Germany’s “location,” redistribute profits and so forth. This is always maintenance work on the imaginary machine.
Let us look closely at this machine. First, a good becomes scarce. But what does it mean that a good becomes scarce? This means people suffer want! Shortage rules, something is lacking! The mechanism presupposes this shortage. One must remember what things mean in reality. The good is scarce! People die of starvation! Then the machine leaps into action. Others begin to produce the same good out of greed for the possibly high prices thoru9gh hunger. The good becomes cheaper. That is already the next problem… Sooner or later another good becomes scarce. Then distress rules again. It is too cheap when more people work in one sector than are necessary, when three corporations serve a market for which one would be enough. What does this mean in reality? This means, none of the three corporations can pay its workers just wages! Then privation prevails again. Then the next wheel starts up in the gears of the market mechanism. What then happens? Two of the three corporations go bust. This bankruptcy of superfluous suppliers is called “market correction.” This also means something in reality! People lose their jobs and their income! Distress rules again.
What drives the machine is the greed of an isolated being completely separated from his fellow persons. What are the basic assumptions for this mechanism? The assumptions are A: that the motive of work is personal gain and B: that one cannot know anything of others…
Who is the “we” in this thinking? If you try to think legally and democratically, you will not find this “we.” The democratic majority is not the subject in my line of thought not simply because neither human needs nor judging production conditions are voting questions. What I have said is impossible if you equate “we” with a democratic majority. If you tried to think economically in the conventional sense, you will hardly find the subject in my thinking…
What are the presuppositions for a person orienting himself in the needs of his fellow persons if he wants this?
Milton Friedman assumes that a person can only have an interest in himself and presupposes no one can know anything about others, that the consciousness of a person coincides with his emotions. Then Friedman reflects what arrangement under these presuppositions could promote the well-being of everyone. The rest is consistent. The arrangement necessary under these presuppositions if the person thinks logically is the invisible hand. That is clear when no one can know anything about others and everyone only thinks of himself. Then only the extraterrestrial can survey the whole and guide, not the person.
Let us now assume the person is not an autist but has an interest in other persons. We do not exclude from the start that he can know something of the needs and abilities of his fellow creatures. Then we proceed like Milton Friedman and think logically. We ask: what arrangements are needed regarding these presuppositions to provide as many people as possible with the greatest possible prosperity?…
If it is true that we cannot know anything of the skills and needs of people with whom we are connected, then only egoism is possible. The presupposition for that transformation is orienting oneself in the needs of others so I can act out of love to my fellow humans, that I can see others. Without perception, no social action is possible. Thus we must start from a being outfitted with a comprehensive knowledge and then ask what arrangement makes possible such comprehensive knowledge…
Milton Friedman could have raised the most important question: what arrangement is necessary for a comprehensive consciousness? What arrangement is needed so every person can have an awareness of other persons so he/she can know something of the significance of his consumption and the significance of his work for other persons?
First we should make clear what kind of knowledge is needed. Economic life has 3 spheres, trade, production and consumption… More is needed than information about the merchant. The fact that a good is demanded intensely does not mean the need increased and the good must be multiplied. That is another dogma of our market theoreticians, that demand corresponds to need. That is not true. Imagine holding a cola before the nose of a starving person. Of course he will take the cola. But he would have preferred bread. You cannot know this fact when you sell him the cola. It would be fatal if you would not begin producing more cola instead of bread, only because the demand for cola increases.
Our market theoreticians justify production through sales. They think if a product can be sold that proves that the producer meets the need. The person satisfies another need as a substitute when he cannot satisfy one need. Pay attention how often you buy something as a substitute for what you really need. For example, I will fly to Frankfurt next week but I don’t like flying. I only fly because the train is too expensive. Thus you cannot conclude from the act of buying alone to the content of the need. If we really want to work for the needs of other people, if we really want to order production according to needs and if one day need should determine supply, then we must let needs be articulated, particularly real needs.
This becomes more understandable when persons are seen with many needs and never a single need. These needs are in relation to one another. For example, there is a need for bio-fuels. People want to buy cheap bio-sprit. On the other side, there is a need for grain and corn. People want to buy cheap grain. Both interests are in contradiction. When people want cheap bio-fuel, a corresponding land surface in agriculture must be used for bio-fuel instead of corn destined for consumption. The corn will become more expensive. When you buy bio-sprit, you raise the price of your morning bread. That is a fact. But normally you know nothing about how one need is satisfied at the expense of other needs…
When a certain amount of bio-fuel is produced, a certain number of people starve to death… Decisions are made exclusively on the individual plane. Every individual decides for himself his work, with whom he wishes to cooperate and what he will consume… Association has 2 poles, a consciousness and an action pole. Consciousness is collective while action is purely individual.
Do you recall the question at the outset? I asked who is really the subject in the demands of the McPlanet organizers? Is the subject some power beyond us? Who is the subject in the associative economy?
The subject is the individual acting out of knowledge. We replace the individual acting out of knowledge with a headless beast driven about by an external law or pressure. The association is the answer to the question: how can the economy be built on the individual acting out of knowledge? In truth all power belongs to the individual actor, not to an “invisible hand,” a “business cycle” or some other fantastic idol. Every economic arrangement that does not include human individuality produces misery and distress – because a person in truth is the economic subject and not some otherworldly god… Everyone can know something about everyone else. That is the idea of association.
Rudolf Steiner tried to make the ideal of anarchism real in a different way than anarchists. What is the anarchist ideal? The ideal of anarchism is freedom from rule… Anarchists spin ideas either in theories or in pipe dreams or castles in the air, take action or recognize that economic, legal and cultural processes are different from each other in social life.
To actually realize freedom from rule, you must consider the reality that we have three possible forms of human life together. All three areas must be soci8alized, not one or two. Socializing means something different in every area because the processes are different. Therefore Rudolf Steiner gave the name “social three-member” (soziale Dreigliederung) to his social idea. The social three-member is the idea of making all three areas of social life transparent for the individual, the cultural life, the legal life and the economic life, that people can manage their life in every area of social life. It is an idea how this can happen, how these three areas can be penetrated by the free will of individuals and how every area can be built completely on human individuality.
I tried to make clear how this can be tackled in the economy. The answer is we must strive for an associative economics, an economics associating opposing interests. We must also raise the question of freedom from rule for the law and for culture. Then we will see that the same question can be answered very differently because law and culture are based on very different processes than the economy. Some of you surely see where the hook would be in realizing the associative economy… After the economic question, there is the legal question. The legal question is the question about property and sale of working hours.
When the McPlanet organizers appealed to the law in this connection, I can understand that… Neoliberals, attac and basic income enthusiasts do not grapple with the law and the state. They want to tackle the economy with the state. They are not interested in the law or the question of ownership of the means of production. They want to meddle in the economy with the state… We do not have to ask how the state should regulate the economy but how we could manage the economy. That we can administer it ourselves cannot be questioned because we alone have the power. We have the power because we are the ones who work, buy, sell and consume. That is the whole economy. Therefore we can also organize the economy. Our economic power becomes real the moment we understand this… The banks, cartels and oppressors would immediately disappear when people get the message that they have the economic power all the time and no one else. People are unable to carry out their power because are so fixated on the state that they cannot see their own responsibility.
Association is the answer to the following questions: how can the person be set in the center of the economy, how can we create arrangements in which we have knowledge about the needs and abilities of people and how can be find that arrangement through which the action of every individual person rests on his/her free decision and is not caused by pressure or by laws?
Is association a utopia? No. It is merely that arrangement through which people can live out something other than egoism if they want. It is a perception organ for the economy. Such an organ of perception is the unconditional prerequisite for a brotherly conduct in a division of labor economy. When you do not know the needs of others, you cannot do anything for them. Utopia merely consists in assuming people want to act in a brotherly way. That is my utopia or my supposition just as it is a supposition that people are anti-social. People are assumed to be anti-social by nature because the capacity for conscious and brotherly conduct is denied them. Arrangements were created by which people are cut off from one another so they must act selfishly! We could create good arrangements through which they could act in a brotherly way if they want.
Look at the phenomenon fair trade. One pays another more because he knows the other could not otherwise live. The customer who buys fair trade products focuses on the producers and not only himself. The possibility of knowing something about the other and the possibility of not acting selfishly exist. People could suddenly act in a brotherly way. A social drive could be nurtured in people, something different than the ego drive. The social drive must be rather strong to prevail. There is no reason not to build arrangements that encourage the social drive of people instead of the ego drive… We cannot rely on power fantasies any more if we want to go forward. We must rely on the individual. All responsibility lies there whether we want to see this or not. A "world summit" is something for the little educated in social science questions, simply childish, pubertarian and completely utopian!
We must leave the dialectic between state god and economy god and enter in real life. We must overcome the longing for one to take responsibility in our place, who dodges or shifts responsibility somewhere. We must give ourselves a jolt and disentangle the threads on which we hang. We must trust in really entering this earth with our whole being as fully conscious responsible persons.
RELATED LINKS:
http://www.paecon.net
For an Immediate End of the Austerity Policy in Europe
Posted on June 12, 2013 by Marc
“The growth model forced in the past with redistribution from bottom to top and increasing export surpluses has failed. The social and ecological demands for a sustainable economic policy grow. For years, the demands of the Alternative Economic Policy study group emphasized combating mass unemployment and poverty, taming the financial markets and an adequately financed public sector to do justice to the social-ecological redesign of society as a mega-social project. This should be financed by a tax concept based on the principles of efficiency and justice.”
Jens Berger in “The Error of the Euro-Rescuers and the Silence in the Press” explained how the IMF ordered a suicidal austerity policy for half of Europe. In October 2012 the IMF caused a sensation when it admitted it wrongly estimated the negative economic effects of state spending cuts. In a study at the beginning of the new year, the chief IMF economist Blanchard declared that the IMF actually miscalculated. An overly low “fiscal multiplier” was assumed in its forecasts.
In Europe and the US, the market and the invisible hand are often stylized as natural laws, self-correcting or self-healing. Structural criticism is often made taboo and economic problems are trivialized or personalized as psychological or motivational, bad apples or bumps in the road. When the trickle down medicine fails, the only cry is often for more medicine! Emphasizing profits instead of welfare leads to exploding inequality, generalized insecurity and atrophy of public spirit. The financial crisis of 2008 was caused by perverse business models and perverse incentives and encouraged by low taxes on capital and a corrupted political system reduced to being an errand boy for the banks (cf. Bill Moyers).
to read “For an Immediate End of the Austerity Policy in Europe” and “The Error of the Euro-Rescuers and the Silence of the Media” by Jens Berger published in January 2013, click on
http://la.indymedia.org/news/2013/06/260540.php
VIDEO: Austerity – The History of a Dangerous Idea, 1 hr 7 min
Posted on June 7, 2013 by Marc
Mark Blyth is Professor of International Political Economy in the Department of Political Science at Brown University and a Faculty Fellow at Brown’s Watson Institute for International Studies
Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts – austerity – to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Watch Professor Mark Blyth discuss the main themes of his latest book at Google Talks: Austerity – The History of a Dangerous Idea
to watch the 1 hr 7 min lecture by Mark Blyth from May 6, 2013, click on
http://www.social-europe.eu/2013/06/austerity-the-history-of-a-dangerous-idea/
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The future could be full of community centers, Gracias Vancouver!
Posted on June 2, 2013 by Marc
The future could be full of community centers, free Internet books and soft power since our nature is full of play, exuberance and mystery!
Links to 12 free Internet books, 50 videos and 650 translated articles on the economic crisis await you at http://www.freembtranslations.net.
Commons-based, post-growth, post-autistic and alternative economics could replace the capitalist market economy with its dominating financial markets and trickle-down and self-correcting market mythology. Unlike a chair, an idea can be shared by a whole people!
Access could replace excess, enough could replace more and respect for nature as our partner and future provider could replace trivializing nature as a free good, external or sink (cf. http://www.steadystate.org, http://www.worklessparty.org, http://www.therealnews.com, http://www.buzzflash.com, http://www.commondreams.org, http://www.submedia.tv, http://www.onthecommons.org).
German novelist Ingo Schulze’s 2012 “Our Beautiful New Clothes” explains how we have accepted the form and not the substance of democracy. People were convinced of the “emperor’s new clothes” until a child cried “but he has nothing on.” Maybe Hans Christian Andersen’s fairy tale can help us understand our predicament.
I hope you are strengthened by Ingo Schulze’s “10 Theses about the Crisis” and Peter Ulrich’s “Economic Ethics after the Crisis.”
HOW DOES JUSTICE COME TO THE ECONOMY?
By Johannes Mosmann
[This address from 11/30/2010 at the GLS bank Christmas meeting of the “Fair and Regional Charter” is translated abridged from the German on the Internet, http://www.fair-regional.de,]
Ladies and Gentlemen,
I was invited to speak about the question what justice in economic life can mean, what the word “fair” implies when we speak of “fair trade” or the “Fair and Regional” initiative. This is obviously a vast theme that I can only outline in the half hour allotted. What is fair in fair trade? Different answers are possible here. The end-consumer in the West must pay the producer in the third world more, One could think of the little community where agriculture is carried out through contributions of coop members. One could focus more on what happens in the value-creation chain before the product reaches the customer, that is what happens between producer, processor and trader.
Many ways are now tested to bring more justice and fairness into our cooperative life. Everything bad and cruel that our age inflicts doesn’t need to be denied to proclaim on the other side that our age also brings a hope that is not yet. This hope is something new. Obviously there have been many idealists with sublime ideas before us. Comprehensive drafts of society were dreamt up by individual minds and then introduced somehow. Individual heads believed they had the perfect idea for the life together of all people and tried to promote this idea in reality. An idea simply extrapolated from a head into reality is a foreign body for this reality, something stiff, rigid and inflexible that cannot be digested by the living process of social life. Thus an idea becomes a tyranny for life. For that reason the great social utopias from socialism to neoliberalism must become tyrannies for people.
Something else is involved with the movement for solidarity economics. There people are clear that they have an inner life, an intellectual or spiritual life and that this intellectual or spiritual life is very different from the outward reality of the present social process. The self with its ideals is on one side and the social life in its present form is on the other side. The two do not agree. In this movement for solidarity economics, people become active who do not react to the contradiction between their ideals and outward conditions in urging a super-idea as a law from some world summit forcing all persons to become ideal persons. Far-sighted persons set out in the movement for solidarity economics. These people feel they are part of this outward life and do not only live in their inner life. I have to move in this outer world. Moreover I violate my ideals… When I buy something, I pay a value-added tax and the taxes are then spend for the war in Afghanistan or for bailing out speculators. Since one cannot be other than in this world and moving in it, one must answer the question very differently about doing justice to the ideal in oneself…
With every social initiative, with every social organization and every institution of social life, one must work against the force of gravity of one’s institution and endure this tension.
Therefore returning again and again, going inward again and again and visualizing the ideal from which one starts is essential for a social project. One has to go beyond and submerge. One must return to oneself and make clear one’s goal. So I understand my task, to give a little impulse so you can desist in the next hour from concrete everyday work and envision the ideal of justice. What does justice in economic life mean? What is fair trade? I must admit something is wrong about the question. A very funny feeling creeps over me… The fact that there is something like Fair Trade reveals the whole decadence of our way of life. Fair Trade casts a light on the state of this economic life by the absurdity that economic life should be made fair… Even if Fair Trade may not be a future-friendly model for the economy, it makes clear what must change in the future.
Regarding fundamental principles of the economy, the economy is based on people exchanging services with one another. This service exchange is absolute in the modern division of labor economy since every person completely depends on other persons producing completely depends on other persons producing vital things and can hardly survive from his or her own work. If the economy has its own principle, it is altruism not egoism. I turn the question upside down. I don’t ask first how justice comes into the economy. I ask: how does injustice come into the economy? How is egoism possible? I have pursued this question in the last years.
The causes of injustice lie in the legal life and cultural life, not only in the economic life. How is it possible that the farmer in Ethiopia is given 1 euro as a daily salary for coffee while he must buy the kilo of millet seed to feed his family for 1.30 euro and thus live like an animal so we can sit around in our luxury furniture and sip coffee. On a legal plane, an inequality arises that one has state authority on one’s die and the other is opposed by state authority. The hierarchy oi power is involved. Inequality before the law is ensured through the ownership law imported from Roman patriarchy and transferred to Africa… Ethiopia needs aids supplies and knowledge technology from the West. Flowers, grains, coffee and so forth are now cultivated everywhere in Ethiopia for Germans, Saudis and Israelis. Ethiopians are held as slaves.
One can only answer the question about the cause of injustice when all 3 areas of human life are considered… The conditions for a fair trade have to be sought in the legal and cultural areas, not only in the economic sphere. For example, these conditions depend on the land being used for grain and not taken away…
Like development in the legal realm, fairness in the economy depends on development in the cultural sphere. “Fair and regional” is ultimately based on people appropriating a certain view of the person beginning to be interested in other people and beginning to be interested in the relation of humans and nature. Thus fair trade is dependent on the cultural area and on the education question. People must be educated so they have an interest in each other. They can develop an understanding for the special needs, abilities and inclinations of others to make justice possible in the economic area. The hurdles we have to surmount in education are in no way less than the hurdles in economics or in the legal realm. Since education is not free or unliberated, education is ruled by the powers that carry ou9t injustice. People cannot freely research or be freely educated because education is dependent on state- and economic power… We may not indulge in illusions any more: the educational system is largely in the hand of markets that are hardly interested in justice and fairness…
The economy may not be seen unfiltered. Rather we see it in the way it was instilled through the educational system. It was instilled in us with a very specific picture of the economy. That is the picture of the Homo Oeconomicus, the person who thinks firstly only of himself, who is not interested in his fellow-persons and secondly can know nothing of his fellow-persons since he is completely cut off from them. He only knows the price of the commodity but knows nothing about how this price came about or about the people who produced the good. That is a picture of our economic perception. For that reason our perceptions are deeply unscientific. The Homo Oeconomicus has its origin in theology; it is connected with a certain simple piety, with the idea that a person cannot claim to know too much because life is ultimately guided by God’s invisible hand.
The autistic person who only focuses on himself gains as much as possible, gives as little as possible and wants to know nothing of his fellow-persons was made the cornerstone of our society. Perhaps you know the foundingthers of the social market economy, Franz Bohm, Alexander Rustow, Walter Eucken and others were also the founders of neoliberalism. The originators of the social market economy were identical with the founders of neoliberalism. I know neoliberalism is mostly confused with American imperialism or American neo-conservatism. However that is only an example of how neoliberals have completely succeeded in dominating human thinking.
I have grappled in detail with the writings of neoliberal theoreticians who established the social market economy that all the parties had to acept if they did not want to be stamped as enemies of the constitution. First of all, neoliberalism starts from the impossibility that the participants of the economy can know anything about one another. Therefore it faces the question: how can order come into chaos when no one can know anything of the others? Earlier the father of the family could see who needed what, who had what abilities and whether it was better for everyone’s well being whether the son chopped wood or grew wheat. In the world economy, everyone depends on everyone being in the right place and the right amount of goods produced. However the economy has become a great network that no one can survey anymore. The neoliberal thesis is that an ordering system is needed to replace the judgment of the family father. People can know nothing of each other. Walter Eucken devised the right system for them so the economy does not become chaos. Thus the social market economy arose and neoliberal think tanks built all over the world starting from Germany drummed the idea of the perfect economic system into heads. Now it has become a chaos. In 2012 approximately 30 million had to die an excruciating death from starvation, even people who had worked for the world market. Why? People did not want to know anything of one another…
What must be known to judge the economic process rightly and know the right measures today for our well-being tomorrow? Every day what the farmer needs for life changes. The price structure changes continuously because it depends in a dynamic way on genuine life on what the farmer needs today and will need tomorrow. It also depends on whether the soil quality will be better or worse. The price that the farmer must receive for his grain depends on many factors that only the farmer can know. How can I know this?… I must slip into the role of merchant because the merchant knows what he can sell at what price… Ultimately I must slip into the role of consumer to know what the consumer wants, what he needs and whether he can have it at that price.
To make a true statement about the economic process, I must leave my own skin. A total knowledge of the economic process necessitates leaving my own skin and putting myself in all people involved in the value-creation…
Still the economy is not a private car but a living process that moves and shifts as the expert knowledge of individual persons interact and this expert knowledge meets the needs of individual persons who are living and nature which is also living. This is something fluctuating and dynamic. To guide this, one must feel what every individual feels, observe what everyone sees and what everyone wants. Because this is impossible, I realized after long reflection I cannot dream up the best economic system…
In reality one can create the possibility that the expert knowledge is carried out, that the many limited judgments can combine and be communicated so what is practically possible out of the collaborator of individual judgments becomes concrete. As a result, one stops being a Homo Oeconomicus and begins to see the abilities and needs of his fellow-persons. That is the consequence as soon as one refuses to hit his head against the wall, that one abolishes the Homo Oeconomicus and realizes the possibility of a mutual perception. The consequence is that one annuls the Homo Oeconomicus by being interested in others… The grain prices rise or hit the roof. The actual costs of agricultural production must be the starting point and a middle way found between the interests of farmers and the interests of retailer5s and workers found so all the concerned can live. They dialogue with one another and begin to be interested in others. So one can tackle reality and approach the ideal of justice or fairness.
As soon as the prejudice of Homo Oeconomicus is abolished, all theories are also annulled since there will be nothing to theorize any more. Then the superstition of the invisible hand that guides our fate and even marks the Greens-party program gradually loses its appeal. How can this mutual perception become more practical?… Not all the participants in the value-creation chain are at the table. For example, I do not sit at your table although I am part of the value-creation chain. I am part of the value-creation chain. I am one of your customers….
Now Christmas is here and people run about with the idea of brotherliness in their heads. Settled in heads, brotherliness hardly becomes concrete or takes root. Brotherliness cannot be present ideally. It can only be present when realities are created where people who share in the value-creation see one another. If they cannot see, they have no other choice than to act selfishly. Therefore your initiative is so important. It creates the possibility of being unselfish. A reality simply opposes the ideology… We must represent equality before the law and freedom in the spirit really and not only as ideas. The name of the institute is Institute for Social Three-Member Diversity (Dreigliederung). Perhaps we could talk about that…
THE NEOLIBERAL DIALECTIC AND THE ANTHROPOSOPHIC ECONOMIC MODEL
By Johannes Mosmann
[This public address from 3/4/2010 in Sinnewerk, Berlin is translated from the German on the Internet, http://www.dreigliederung.de/essays/2010-03-001.html.]
Ladies and Gentlemen,
In 2009 I attended a congress at the TU (Technical University) called a “McPlanet.” The motto was “Game Over – New Start!” Our economic system ended with the financial crisis. Now we are ringing in a new era. At the beginning of 2009 many believed the financial crisis had to lead to a total breakdown of our capitalist economic system. In this expectation, 1700 young persons came together from all over Germany at the TU Berlin for answers to the questions what is necessary for a new start, where can we begin and what can we do from representatives of diverse NGOs and Gos as for example Heinrich Boll foundation, attac, Greenpeace, FIAN and others.
For two days there were presentations and discussions. On the evening of the 3rd day, the plenary from the most represented organization announced the common conclusion. Hundreds of people, mostly youth, stared spellbound at the way ahead. Then the idea for the new start appeared: politicians should finally do something!
Imagine 1700 youths with fresh spirit, full of energy and hope who make redundant our civil rights activists: those above should do something! Every hope, every impulse and every possibility for tackling and transforming social life was nipped in the bud.
What was wrong there? What mentality was manifest? How can this consciousness be characterized?
The organizers of the congress were surprised by the people who came to the congress. That was a surprise. They did not expect actors of the social life. People were not included with their social plans for people. They dreamt up plans for people in which the people could not found did not appear!
What do these “social” organizations expect when they do not include people?… One hears the same everywhere, everyone thinks the same whether left or right, whether materialists or anthroposophs. What makes the answers so monotonous and what underlines the synchronization or enforced political conformity is the real crisis and the real catastrophe. Consider the following demands:
“With a special tax, massive funds could overcome the consequences of crises and future-friendly reconstruction of our society… Tax havens must be dried up and hedge funds and highly speculative financial products prohibited. Banks are service providers of society and should be under consistent public control. AQ financial transactions tax could check speculation and finance the consequences of crises. The casino must be closed… The international Monetary Fund (IMF) and the World Bank must be democratized and their programs oriented to social-ecological criteria. Crisis management and re-regulation of the world economy should be discussed in the framework of the United Nations…
Export-subsidies of industrial countries should be abolished and speculation with food prevented. Trade with agricultural goods must be regulated outside the World Trade Organization. We demand food sovereignty instead of businesses with hunger!”
Do you see? All this hangs in the air! Who is the subject? What does this mean – this should be abolished? Who abolishes and who is the subject?… A petitioner abolishes nothing. Attendees of the meeting abolish nothing. All socialism is exhausted in dreaming up what someone else can do. One has excellent ideas for others but not a single idea for oneself. No demands are made on oneself. The notion that one could be an actor of social life and have something to do with the financial crisis is repressed.
What is a subject? Who is the other who should act in our place? The subject is some kind of central organ, the state, the IMF or the UN. This central organ should prohibit something, pass regulation and coerce people. That is clear. When people are not included, people are forced and controlled from the outside by some super-authority. Every socialization measure that is dreamt up ultimately amounts to a person being demanded and forced by a central organ… The state should help the starving person, the state should democratize the bank, the state should take away speculators’ money, the state should give us a basic income, the state should provide us with work, the state should fully finance our schools, the state, the state, the state. This state must be omnipotent. The state is God; the state is an idol.
Perhaps you know how the modern state arose, how it understood itself as God’s representative on earth and how it fought with God’s other great representative, the Catholic Church. As the state was Christian, the Catholic church conversely was state-like. They could not both hold out in some phases of their development since state representatives hired the priests and the priests collected the taxes. The territorial state emerged as victor from the battle between two religious-state hermaphrodites. Up to today it still retains something of its spiritual appearance, the aura of the sacred. Letting the state educate his children is hardly incredible to a person as well as surrendering the education of their souls to the hands of the state. The state forms those souls according to its image. The whole disobedience of the children of the state consists in giving a quick prayer to the dear state as occurred at McPlanet 2009. We turn imploringly to Father State and ask to be heard because the state-God rules, orders and creates peace and justice. That is the belief in the state on one side.
Belief in the economy, on the other side, is a little different. The publication of the book “Wealth of Nations” of a famous theologian is commonly considered the birth-hour of the national economy. This famous theologian and moral philosopher was Adam Smith. Adam Smith sought God behind the bustling activity of humans, behind a drive and behind egoism, not in the state. You know this. Smith assumed the well-being of everyone is greatest when everyone indulges his egoism uninhibitedly. However when a person intends to do something good to another, he would actually do something less good. The theologian explanation is that God works in the person when he surrenders his selfish drive. A metaphor for this work of God has become famous in this connection: an invisible hand, Smith said, increases the happiness of everyone in the moment when the individual only thinks of himself.
That is the core of classical economics. The dear God appears to economic theologians differently than to state theologians. God is more a fate-God, a nature-God…
In the “social sciences,” the person acting consciously is ignored. The person is imagined as a puppet hanging by a thread, a remote-controlled unconscious thing. But what if that is not the reality? What if there is no one at the other end of the thread pulling and guiding us into life? What if we guide ourselves, if we have the reins in our hand but don’t know this since we believe in the heavenly helmsman behind us? Then the hypothesis of the invisible hand leads into chaos. I think that is happening at the moment…
People obsessively project the dear God everywhere: an invisible hand, the economy, “the law” or some representative on earth like the UN that brings life… Gerhard Schroeder once said the economy is to blame for unemployment… The dear God has done this. The German chancellor even said, the dear God is to blame. This happens in the 21st century…
The word liberalism is obviously included in the word neoliberalism. Liberalism is the ideology to which Adam Smith was devoted. Adam Smith did not invent this liberalism. He described how people actually behaved in the England of his time and what faith was expressed in their thoughtless actions… The dominant ideology today that has become a world ideology comes from the German language area: neoliberalism. Neoliberalism is something German; neoliberalism is the German export-hit. Americans adopted it but it originates from Germany.
Neoliberalism arose at the beginning of the 20th century in Germany and Austria and demonstrated at that time that the invisible hand of the economic God carried out an evil game with people. Unemployment, hunger and mass impoverishment were obviously intended by the economic God. Therefore some liberals in Austria and Germany turned to the other God, the state-God. A social science developed in which thinking was thrown here and there between the two pictures of God and driven in a dialectic between economy and state. On one hand, people believed egoism promotes the general interest. On the other hand, people believed the state must lay down certain rules. In both the Freiburg school and the so-called Austrian school, different mixed forms of the two idols were attempted, between the state and the blind economy. These mixed forms were called the “third way.”
The showpiece model of neoliberalism is the social market economy in Germany… Alexander Rustow coined the term “neoliberalism.” Rustow understood himself and neoliberalism as a “liberfal criticism of liberalism.” He wrote a book titled “The Religion of the Market Economy”… According to Rustow, the state must regulate the economy! That is neoliberalism! On one side is the free play of the market and on the other side the regulating state… Liberalism desires little state because it presumes a magical socialization power in egoism while Marxism emphasizes much state because it sees throu9gh the specter in this relation. The intermediate form between these extremes is neoliberalism. There are different varieties within neoliberalism with finer points around the kind of regulation, the kind of tax as for example the Tobin tax and so forth…
The demand that the financial market should be regulated is a neoliberal position!…
Consciousness must come from the outside since making profits depends on knowing nothing of the consequences of actions and that actions have terrible consequences. There must be a monitoring from the state side. The state must regulate from the outside to make the economy and justice possible since the economy depends on ignorance.
This is the logic in which we are all caught. We all start from an assumption… and remain captive in neoliberalism… This thesis is made into an economic law when the thesis that the economy only knows egoism is reinforced. This thesis is made the untested assumption for all thinking about the social. The focus of inflammation is in the social organism. That is the origin of egoism in the economy! That is the great ideology at the beginniing of all social evil of the present!…
I read Milton Friedman. When you read him, a view of the person seems projected by our economics. In Friedman’s thinking, human consciousness seems like the atom…. Social life is brought about by the collision of encapsulated humans enclosed in themselves. These human-atoms only know what they want to have and what they can give. This is all the person needs in consciousness, according to Milton Friedman. Why something is expensive, what happens in the factories, what are the needs of workers, how conditions of production change and so forth do not need to interest anyone. One only needs to know it is expensive. All of these atoms whirring around is not a chaos because these atoms are ruled by a natural law. This law ruling people from the outside is the market mechanism,t he invisible hand.
You can see in Milton Friedman that neo-liberal thinking is never really thought out… We should stop polemicizing against neoliberalism and look at this neolioberalism in an unbiased way to know where its errors are.
Firstly, a person cannot know anything. This is the first hypothesis. Therefore one seeks an invisible hand. Then the invisible hand is justified so that a person doesn’t need to know anything thanks to this invisible hand. Suddenly it becomes a doctrine of salvation! Finally the question how the invisible hand functions is answered: a person cannot know anything if the invisible hand is to function. This turns the world upside down. A coercion comes out of the hypothesis. At least Milton Friedman is not inconsistent. He demands state protection of ignorance. The state should ensure no one can know anything through monopoly laws, bank secrecy and the like. From the hypothesis of ignorance, knowledge can be prevented with force to test the utopia of the invisible hand. Without ignorance, one could not hope for the grace of an invisible hand That is economic policy: create space for the imaginary invisible hand by cutting off the connections between people. The state ensures people can know nothing of one another.
Economic theologians describe the invisible hand as a mechanism, a “market mechanism.” What characterizes this mechanism, this natural law? First, a good becomes scarce and there is no longer enough for everyone. Those who can afford it offer more for the good to guarantee their provision. The producer can take more for his product. Prices can increase because there are enough people who buy it. The possibility of higher prices awakens the greed of other people. They begin to produce the same good in expectation of high profits. This leads to increased production. The product then becomes cheaper. Some time or other a balance occurs between supply and demand. That is the theory of the machine.
To keep the machine running, we have politicians. That is the job of politicians that we expect from them. They should increase the “purchasing power” of the poor man through tax cuts, prevent price agreements, promote Germany’s “location,” redistribute profits and so forth. This is always maintenance work on the imaginary machine.
Let us look closely at this machine. First, a good becomes scarce. But what does it mean that a good becomes scarce? This means people suffer want! Shortage rules, something is lacking! The mechanism presupposes this shortage. One must remember what things mean in reality. The good is scarce! People die of starvation! Then the machine leaps into action. Others begin to produce the same good out of greed for the possibly high prices thoru9gh hunger. The good becomes cheaper. That is already the next problem… Sooner or later another good becomes scarce. Then distress rules again. It is too cheap when more people work in one sector than are necessary, when three corporations serve a market for which one would be enough. What does this mean in reality? This means, none of the three corporations can pay its workers just wages! Then privation prevails again. Then the next wheel starts up in the gears of the market mechanism. What then happens? Two of the three corporations go bust. This bankruptcy of superfluous suppliers is called “market correction.” This also means something in reality! People lose their jobs and their income! Distress rules again.
What drives the machine is the greed of an isolated being completely separated from his fellow persons. What are the basic assumptions for this mechanism? The assumptions are A: that the motive of work is personal gain and B: that one cannot know anything of others…
Who is the “we” in this thinking? If you try to think legally and democratically, you will not find this “we.” The democratic majority is not the subject in my line of thought not simply because neither human needs nor judging production conditions are voting questions. What I have said is impossible if you equate “we” with a democratic majority. If you tried to think economically in the conventional sense, you will hardly find the subject in my thinking…
What are the presuppositions for a person orienting himself in the needs of his fellow persons if he wants this?
Milton Friedman assumes that a person can only have an interest in himself and presupposes no one can know anything about others, that the consciousness of a person coincides with his emotions. Then Friedman reflects what arrangement under these presuppositions could promote the well-being of everyone. The rest is consistent. The arrangement necessary under these presuppositions if the person thinks logically is the invisible hand. That is clear when no one can know anything about others and everyone only thinks of himself. Then only the extraterrestrial can survey the whole and guide, not the person.
Let us now assume the person is not an autist but has an interest in other persons. We do not exclude from the start that he can know something of the needs and abilities of his fellow creatures. Then we proceed like Milton Friedman and think logically. We ask: what arrangements are needed regarding these presuppositions to provide as many people as possible with the greatest possible prosperity?…
If it is true that we cannot know anything of the skills and needs of people with whom we are connected, then only egoism is possible. The presupposition for that transformation is orienting oneself in the needs of others so I can act out of love to my fellow humans, that I can see others. Without perception, no social action is possible. Thus we must start from a being outfitted with a comprehensive knowledge and then ask what arrangement makes possible such comprehensive knowledge…
Milton Friedman could have raised the most important question: what arrangement is necessary for a comprehensive consciousness? What arrangement is needed so every person can have an awareness of other persons so he/she can know something of the significance of his consumption and the significance of his work for other persons?
First we should make clear what kind of knowledge is needed. Economic life has 3 spheres, trade, production and consumption… More is needed than information about the merchant. The fact that a good is demanded intensely does not mean the need increased and the good must be multiplied. That is another dogma of our market theoreticians, that demand corresponds to need. That is not true. Imagine holding a cola before the nose of a starving person. Of course he will take the cola. But he would have preferred bread. You cannot know this fact when you sell him the cola. It would be fatal if you would not begin producing more cola instead of bread, only because the demand for cola increases.
Our market theoreticians justify production through sales. They think if a product can be sold that proves that the producer meets the need. The person satisfies another need as a substitute when he cannot satisfy one need. Pay attention how often you buy something as a substitute for what you really need. For example, I will fly to Frankfurt next week but I don’t like flying. I only fly because the train is too expensive. Thus you cannot conclude from the act of buying alone to the content of the need. If we really want to work for the needs of other people, if we really want to order production according to needs and if one day need should determine supply, then we must let needs be articulated, particularly real needs.
This becomes more understandable when persons are seen with many needs and never a single need. These needs are in relation to one another. For example, there is a need for bio-fuels. People want to buy cheap bio-sprit. On the other side, there is a need for grain and corn. People want to buy cheap grain. Both interests are in contradiction. When people want cheap bio-fuel, a corresponding land surface in agriculture must be used for bio-fuel instead of corn destined for consumption. The corn will become more expensive. When you buy bio-sprit, you raise the price of your morning bread. That is a fact. But normally you know nothing about how one need is satisfied at the expense of other needs…
When a certain amount of bio-fuel is produced, a certain number of people starve to death… Decisions are made exclusively on the individual plane. Every individual decides for himself his work, with whom he wishes to cooperate and what he will consume… Association has 2 poles, a consciousness and an action pole. Consciousness is collective while action is purely individual.
Do you recall the question at the outset? I asked who is really the subject in the demands of the McPlanet organizers? Is the subject some power beyond us? Who is the subject in the associative economy?
The subject is the individual acting out of knowledge. We replace the individual acting out of knowledge with a headless beast driven about by an external law or pressure. The association is the answer to the question: how can the economy be built on the individual acting out of knowledge? In truth all power belongs to the individual actor, not to an “invisible hand,” a “business cycle” or some other fantastic idol. Every economic arrangement that does not include human individuality produces misery and distress – because a person in truth is the economic subject and not some otherworldly god… Everyone can know something about everyone else. That is the idea of association.
Rudolf Steiner tried to make the ideal of anarchism real in a different way than anarchists. What is the anarchist ideal? The ideal of anarchism is freedom from rule… Anarchists spin ideas either in theories or in pipe dreams or castles in the air, take action or recognize that economic, legal and cultural processes are different from each other in social life.
To actually realize freedom from rule, you must consider the reality that we have three possible forms of human life together. All three areas must be soci8alized, not one or two. Socializing means something different in every area because the processes are different. Therefore Rudolf Steiner gave the name “social three-member” (soziale Dreigliederung) to his social idea. The social three-member is the idea of making all three areas of social life transparent for the individual, the cultural life, the legal life and the economic life, that people can manage their life in every area of social life. It is an idea how this can happen, how these three areas can be penetrated by the free will of individuals and how every area can be built completely on human individuality.
I tried to make clear how this can be tackled in the economy. The answer is we must strive for an associative economics, an economics associating opposing interests. We must also raise the question of freedom from rule for the law and for culture. Then we will see that the same question can be answered very differently because law and culture are based on very different processes than the economy. Some of you surely see where the hook would be in realizing the associative economy… After the economic question, there is the legal question. The legal question is the question about property and sale of working hours.
When the McPlanet organizers appealed to the law in this connection, I can understand that… Neoliberals, attac and basic income enthusiasts do not grapple with the law and the state. They want to tackle the economy with the state. They are not interested in the law or the question of ownership of the means of production. They want to meddle in the economy with the state… We do not have to ask how the state should regulate the economy but how we could manage the economy. That we can administer it ourselves cannot be questioned because we alone have the power. We have the power because we are the ones who work, buy, sell and consume. That is the whole economy. Therefore we can also organize the economy. Our economic power becomes real the moment we understand this… The banks, cartels and oppressors would immediately disappear when people get the message that they have the economic power all the time and no one else. People are unable to carry out their power because are so fixated on the state that they cannot see their own responsibility.
Association is the answer to the following questions: how can the person be set in the center of the economy, how can we create arrangements in which we have knowledge about the needs and abilities of people and how can be find that arrangement through which the action of every individual person rests on his/her free decision and is not caused by pressure or by laws?
Is association a utopia? No. It is merely that arrangement through which people can live out something other than egoism if they want. It is a perception organ for the economy. Such an organ of perception is the unconditional prerequisite for a brotherly conduct in a division of labor economy. When you do not know the needs of others, you cannot do anything for them. Utopia merely consists in assuming people want to act in a brotherly way. That is my utopia or my supposition just as it is a supposition that people are anti-social. People are assumed to be anti-social by nature because the capacity for conscious and brotherly conduct is denied them. Arrangements were created by which people are cut off from one another so they must act selfishly! We could create good arrangements through which they could act in a brotherly way if they want.
Look at the phenomenon fair trade. One pays another more because he knows the other could not otherwise live. The customer who buys fair trade products focuses on the producers and not only himself. The possibility of knowing something about the other and the possibility of not acting selfishly exist. People could suddenly act in a brotherly way. A social drive could be nurtured in people, something different than the ego drive. The social drive must be rather strong to prevail. There is no reason not to build arrangements that encourage the social drive of people instead of the ego drive… We cannot rely on power fantasies any more if we want to go forward. We must rely on the individual. All responsibility lies there whether we want to see this or not. A "world summit" is something for the little educated in social science questions, simply childish, pubertarian and completely utopian!
We must leave the dialectic between state god and economy god and enter in real life. We must overcome the longing for one to take responsibility in our place, who dodges or shifts responsibility somewhere. We must give ourselves a jolt and disentangle the threads on which we hang. We must trust in really entering this earth with our whole being as fully conscious responsible persons.
RELATED LINKS:
http://www.paecon.net
For an Immediate End of the Austerity Policy in Europe
Posted on June 12, 2013 by Marc
“The growth model forced in the past with redistribution from bottom to top and increasing export surpluses has failed. The social and ecological demands for a sustainable economic policy grow. For years, the demands of the Alternative Economic Policy study group emphasized combating mass unemployment and poverty, taming the financial markets and an adequately financed public sector to do justice to the social-ecological redesign of society as a mega-social project. This should be financed by a tax concept based on the principles of efficiency and justice.”
Jens Berger in “The Error of the Euro-Rescuers and the Silence in the Press” explained how the IMF ordered a suicidal austerity policy for half of Europe. In October 2012 the IMF caused a sensation when it admitted it wrongly estimated the negative economic effects of state spending cuts. In a study at the beginning of the new year, the chief IMF economist Blanchard declared that the IMF actually miscalculated. An overly low “fiscal multiplier” was assumed in its forecasts.
In Europe and the US, the market and the invisible hand are often stylized as natural laws, self-correcting or self-healing. Structural criticism is often made taboo and economic problems are trivialized or personalized as psychological or motivational, bad apples or bumps in the road. When the trickle down medicine fails, the only cry is often for more medicine! Emphasizing profits instead of welfare leads to exploding inequality, generalized insecurity and atrophy of public spirit. The financial crisis of 2008 was caused by perverse business models and perverse incentives and encouraged by low taxes on capital and a corrupted political system reduced to being an errand boy for the banks (cf. Bill Moyers).
to read “For an Immediate End of the Austerity Policy in Europe” and “The Error of the Euro-Rescuers and the Silence of the Media” by Jens Berger published in January 2013, click on
http://la.indymedia.org/news/2013/06/260540.php
VIDEO: Austerity – The History of a Dangerous Idea, 1 hr 7 min
Posted on June 7, 2013 by Marc
Mark Blyth is Professor of International Political Economy in the Department of Political Science at Brown University and a Faculty Fellow at Brown’s Watson Institute for International Studies
Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts – austerity – to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Watch Professor Mark Blyth discuss the main themes of his latest book at Google Talks: Austerity – The History of a Dangerous Idea
to watch the 1 hr 7 min lecture by Mark Blyth from May 6, 2013, click on
http://www.social-europe.eu/2013/06/austerity-the-history-of-a-dangerous-idea/
Posted in 2011 | Leave a comment
The future could be full of community centers, Gracias Vancouver!
Posted on June 2, 2013 by Marc
The future could be full of community centers, free Internet books and soft power since our nature is full of play, exuberance and mystery!
Links to 12 free Internet books, 50 videos and 650 translated articles on the economic crisis await you at http://www.freembtranslations.net.
Commons-based, post-growth, post-autistic and alternative economics could replace the capitalist market economy with its dominating financial markets and trickle-down and self-correcting market mythology. Unlike a chair, an idea can be shared by a whole people!
Access could replace excess, enough could replace more and respect for nature as our partner and future provider could replace trivializing nature as a free good, external or sink (cf. http://www.steadystate.org, http://www.worklessparty.org, http://www.therealnews.com, http://www.buzzflash.com, http://www.commondreams.org, http://www.submedia.tv, http://www.onthecommons.org).
German novelist Ingo Schulze’s 2012 “Our Beautiful New Clothes” explains how we have accepted the form and not the substance of democracy. People were convinced of the “emperor’s new clothes” until a child cried “but he has nothing on.” Maybe Hans Christian Andersen’s fairy tale can help us understand our predicament.
I hope you are strengthened by Ingo Schulze’s “10 Theses about the Crisis” and Peter Ulrich’s “Economic Ethics after the Crisis.”
For more information:
http://www.freembtranslations.net
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