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Economics for the Right – The Present-day State of Economic Politics

Series: Economics for the Right

Capitalism degenerated and lost any sense of restrain after the end of the Cold War, and its unwillingness to stop and self-evaluate will be its own demise.

In all fairness, it has to be stated that no country in Western Europe, nor on the other side of the Atlantic, has ever been governed totally by neo-liberalism; rather, they have been guided since Thatcher and Reagan by one-sided Keynesian economics with increasing deregulation for special interests. What the Hippies did for sex, drugs and rock and roll, namely increasing its societal acceptance, Reagan and Thatcher did for short-sighted economic greed; both groups, formally opposed to each other, pushed for an individualist egocentric mindset.

What the Hippies did for sex, drugs and rock and roll, namely increasing its societal acceptance, Reagan and Thatcher did for short-sighted economic greed.

This theory of John Maynard Keynes,1 who viewed the economy mainly through the lens of spending, basically aims to level the economic cycle by spending and decreasing taxes in times of crisis (thereby increasing economic growth rates) and cutting costs, raising taxes, and paying back debt in boom times (thereby decreasing economic growth rates). However the second part of this theory gets lost in all Western democracies, as no politician has the will (nor, given the need to be re-elected, can afford to have the will) to play an unpopular role by saving money and decreasing economic growth during years of economic growth.

It would have quite been helpful if all the self-proclaimed evangelical Republicans in the US as well as the Christian Conservatives in Western Europe had read the biblical story of the seven years of plenty and the hard years in Egypt, instead of increasing the debt through unnecessary tax cuts for high-income households. Republican criticism of the deficit under Obama rang rather false, as the Republicans never seem to waste a thought on spending when it comes to special interests or the military – even when the military leadership itself is highly critical of these decisions and points to a larger variety of challenges for US security, such as the educational deficits of new recruits2 or their obesity.3

Bannonist economic nationalist policies likewise propose no alternative, as they are basically the ideology of ‘neo-liberalism in one country’.4 Apart from their emphasis on the trade deficit with China, there is nothing to take from them. President Trump’s chaos brings a kind of magic through his permanent threat of tariffs against foreign nations, thereby creating an atmosphere of distrust in foreign investments and increasing investment in the USA, can hardly be described as a long-term strategy.

All the regulatory cutbacks of the Obama era,5 especially in the financial sector and the environment, naturally bring short-term economic growth, as they might reduce cost or open up new possibilities of spending, investment and hiring.

But there is always a cost which is seldom paid by those who bring it about, whether it be poisoned water through fracking (the videos showing people lighting their tap water on fire are well known)6 or new financial bubbles emerging as the financial sector shakes off the minimal oversight that once existed.

Furthermore, the nostalgia for the post-WWII period up to the 1970s (‘Make America Great Again’) can never be fulfilled by deregulation of the financial markets, which make it far more profitable to invest in the capital market rather than really investing in any intellectual and physical means of production. It must be recalled that from WWII up until the oil crisis of the 1970s, there was no economic crisis in the Western hemisphere.7 This was not because this was the golden age of unregulated capitalism, but because the financial institutions were more or less limited to their core function of redirecting unused capital to private people (usually so that they could become property owners) or to businesses to reinvest this capital into new means of production.

Also, the damage done to Third-World countries by luring the well-educated people out of them and into the US cannot be underestimated, as these people (from medical doctors to engineers to IT specialists) are highly needed to build up their own countries.8

It has to be stated that all the anti-establishment/anti-swamp talk of the Trump campaign was nothing but a trick to attack sensible regulations in the name of special interests. The number of former Goldman Sachs employees present in the Trump administration and the actions that they have taken are more than telling.9

Noam Chomsky is right when he states that the cultural coalition that put Trump into Office (Christian Conservatives, Critics of the Migrant Policy, Second Amendment enthusiasts etc.) are nothing but useful idiots who have probably voted against their own economic interest.10 If that analysis would have been any different under a Clinton administration can be doubted. The remigration number for illegal migrations would probably still be the same (in comparison to the Obama administration).11

The amalgam in Western democracies that has emerged in self-proclaimed conservative parties, from the Republican Party to the Tories up to the CDU (Merkel’s party in Germany), since WWII – namely, the supposedly inseparable and supposedly anti-leftist amalgamation between traditional(ist) conservative values together with a free-market capitalist individualist mindset – is nothing but a lie.

One need not even go so far as to look at the migration policies of these parties once they attain power. Already the introduction for gay marriage and the lack of any substantial, let alone successful, resistance to the devaluation of the most important cornerstone of Western civilization is in and of itself more than telling.

There are higher values that give people meaning and protection, as for instance the nation(-state), the Christian faith, the church, the family, the Army, the people itself, the common good, the community etc. Our leaders, including those of the putative right, have neglected the insight that every higher value, every value that transcends the material, gets eroded or abolished as soon as one replaces it with the market and the faith in the market, within which every problem somehow fixes itself through the mechanism of supply and demand.

Our leaders, including those of the putative right, have neglected the insight that every higher value gets eroded or abolished as soon as one replaces it with the market and the faith in the market.

In fact, the author wonders if the various Christian conservatives have ever read those parts of the Evangelium which are not concerned with the human means and utilities of reproduction.12 As for their actions, or more precisely inaction, one notes above all an undervaluation, not to say ignorance, of the stories of the money lenders or the Sermon on the Mount.

There is no natural connection between conservative and patriotic values and laissez-faire capital interests. The German SPD (Social Democratic Party) is the best example for this, as they have always striven to improve the working and middle classes’ living conditions (until the Schroeder Government and its neo-liberal reforms, the so-called Agenda 2010) through a patriotic-style politics, as the following examples show:

  • Friedrich Ebert’s attempt to save the monarchy at the end of WWI to prevent the civil war in the aftermath of WWI;13
  • The corporation of the SPD with the old military elites and the Freikorps after WWI in their struggle against the communists;14
  • Kurt Schumacher15 (one of the leaders of the SPD after WWI, the greatest twentieth-century German patriot, in the author’s opinion), who lost one arm in WWI and one leg as a result of his imprisonment in a KZ, and who sought to save Germany as a whole instead of seeing its division into West and East. His intense anti-communist attitude dating back to the Weimar Republic has to be mentioned;
  • Willy Brandt, who fought the Nazis during WWII, who campaigned under the slogan ‘Germans – we can be proud of our country (again)’ in 1972, and who became chancellor of Western Germany;16
  • The end of the Recruitment Agreement between the Federal Republic of Germany and Turkey in 1973 as a result of the oil crisis, when chancellor Brandt said that ‘we have to think of our people first’.17

The aforementioned points are not to be seen as unequivocal praise of this party; they are rather provided to show that free-market capitalism and a patriotic mindset do not have to be necessarily linked. Honourable mention goes also to two others: first, the German Social Democrat Thilo Sarrazin, with his 2010 magnum opus Germany abolishes Itself,18 which was the most successful work in patriotic metapolitics in the German-speaking parts of Europe since the end of WWII; second, the new social democracy in Denmark,19 which manages to bind together an economically left-leaning policy with a restrictive common-sense migrant policy.

Nevertheless the productiveness of capitalist economic systems and their superiority to central state planning has been proven in the victory of the US and its allies in the Cold War, as the US with its high-level armaments was able to outreach the Soviet Republic’s economic capabilities, until the latter finally could not keep the pace and finally collapsed. This superiority in production, innovation, life expectancy and adaptability cannot be discarded, but has to be seen in the context of the industrial capitalism of the twentieth century and the government policies surrounding it.

How Communism would have developed if its infrastructure west of the Urals had not been ruined in WWII is a question without an answer. The geographical disadvantages of living in a country that is frozen half of the year also have to be accounted for. The Soviet achievements in the conquest of outer space prove that such a system does not necessarily have to be inferior in any respect to Western capitalism; the International Space Station is still provided with Soviet Soyuz rockets to the present day.

That capitalism degenerated and lost any sense of (self-)restrain after the end of the Cold War is self-evident, and its unwillingness to stop and self-evaluate will be its own demise. There will be written on the tombstone of the West, ‘Too much was not enough’.

It is to be feared that in such a system the guilds would fight against each other even as political parties do today, but probably in an even more brutal way, as they basically represent economic interests in action.

It is the author’s firm belief that the self-fetishization of the capitalist system is the result of the victory of the Western World in the Cold War. This lack of self-awareness, self-questioning and will to self-improvement was not shaken even by the financial crisis of 2007/2008 or the rise of China; one cannot help but think of the decadence of the late Western Roman Empire, and its belief that things would always go on as they had before.

It has already been stated that the global financial system together with the globalisation of goods and services, with all its players and actors, has as much in common with the capitalism of the Cold-War era as with the feudal system.20 At the same time one cannot ignore the positive traits of the totalitarian systems of the twentieth century as well as of present day China. The author does not know the specifics of other European countries, but living in a German-speaking part of Europe, he is certain that no metre of Autobahn could be built today, as this project would get stuck in the courts or be held up for years by demonstrations and citizen initiatives trying to stop its construction. The examples of this ‘not in my backyard’ mentality in Germany are quite telling: from Stuttgart 21 to electric wind mills to airports (especially in Berlin), and beyond. The author wonders if there is any compromise in sight, an Aristotelian ‘golden mean’, so to speak, between the brutal force of the aforementioned totalitarian political systems and the costly consideration of individual local interests (and sometimes of pure decadence) in present-day Germany and other Western countries.

To conclude this review of economic systems, the attempts at corporatism have to be mentioned. That there is no present-day functioning corporate system should not stop anyone who is seeking a new economic theory from taking a critical look at this model. Corporatism tries to show a way that is neither capitalist (individual economic interest) nor communist (economic collectivism), but it attempts rather to organize the different traits and parts of the economy into political and solidaric unities (e.g. guilds) that strive for a common good, thereby eliminating class struggle.

It is to be feared that in such a system the guilds would fight against each other even as political parties do today, but probably in an even more brutal way, as they basically represent economic interests in action.

Moreover, any system that tries to organize present-day economic structures into political entities would merely cement present-day structures of ownership and suppress any sort of new arising technologies and industries. One could of course argue that further technological development is something that will lead to further degeneracy and browsing through social media who could argue against it. But even if Europe stopped developing these new technologies, they will come from other parts of the world to it. And while the Zulus had at least an honourable death facing a British 16-pounder gun, the submission of Europe will be worse, as this it will be largely invisible (e.g. through IT) or irreversible (genetic manipulation of seeds, animals and humans). From genetic engineering to transhumanism, little self-restrain is to be expected from non-Europeans. Europe has at least shown some scepticism and self-restrain when it comes to genetic manipulation or the question of private data in comparison to the US. If Europe wants to keep some influence on future developments and curb the greatest excesses, it has to be technologically ahead, not behind. It has to ride the tiger of technology before others jump on it and chase Europe down.

But returning to corporatism, the author feels obliged to share some negative example of implicit corporatism that can be seen in the German car industry, with its ménage à trois of corporations, state and national governments, and unionized workers. The fetishisation of the car in German culture, comparable to that of firearms in the US, also plays a role in this.

There is no supreme power within this arrangement, but everybody is interested in and working for the preservement of the status quo:

  • The long-term and usually unionized workers (who are quite well paid) as a voting block for the centre-left and centre-right parties, and as demostrators for their political goals;
  • The companies themselves, which are highly subsidized (the worst example being the ‘Abwrackprämie’)21 and which are protected from any real persecution by the law, as seen in the lack of judicial persecution for their misdeeds in the fume-test scandal;22 and
  • The politicians, who receive votes and are able to praise themselves for high employment numbers, and who can spend the raised tax revenue.

Moreover, the downsides to this scheme are often invisible:

  • Explotation of short-term employees and workers employed by subcontractors;
  • The exploitation of the subcontractors themselves (from companies delivering parts to supposedly self-sufficient car salesmen);
  • Technological stagnation (e.g. the inability to provide electric cars comparable to those produced by TESLA);
  • Corporate stagnation (no newly established car companies in Germany or Europe as a whole);
  • The paralyzation of new talents, which would otherwise establish new companies themselves or would help to prop up new industries (e.g. there are no real IT champions in Germany comparable to those of the US).

References

4This is an ironic allusion to the Stalinist concept of ‘Socialism in on country’.

12Again an allusion to Marxist terminology, namely that of the Meme of seizing the ‘means of production’.

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