Democracy's Problem: Crisis or Triumph of Capitalism?

[Oscar]

Democracy’s Problem Is Not The Crisis But The Triumph Of Capitalism

[ http://www.socialeurope.eu/2015/07/demo ... apitalism/ ]

by Wolfgang Merkel on 10 July 2015

INTERVIEW:

NG/FH: In some sense the diagnosis of a »crisis of democracy« has been in the air for a long time. But in recent years the issue has become more urgent, to the point where people are asking whether even the core countries of the OECD still have »genuine« democracies. Those concerns culminate in the observation that, in principle, our countries may be incapable of reform when it comes to crucial matters of economic power, and that in the future they will be little more than pawns of economic power-wielders. What would be a valid criterion for judging democracy’s qualities and gauging the state of its crisis, and what is the proper response to the current situation?

Wolfgang Merkel: These diagnoses are not so easy. Very few of them are capable of clarifying the criterion they use when they refer to democracy. Is it normative, putatively »genuine« democracy? Is it a long-lost golden age of democracy? Both of those criteria would be mistaken. There is no »one« genuine democracy. Would it be direct or representative democracy? Would we like to have more consensus and inclusion, or are we willing to trust in the efficiency of simple majority voting? Do we prefer a centralized or a federal democracy? Do we want to go the Swiss route with its consensus rules, or do we prefer the »Westminster model« with its unalloyed majority rule?

The assumption that there once was a better age of democracy indicates historical amnesia. When was that supposed to have been? In the Sixties or early Seventies? Let’s ask women, ethnic minorities, and homosexuals in the USA, Germany, or anywhere else whether they see things in the same way. Democracies today face a host of problems, but on the whole they are by no means any worse than they were in whichever past you care to name.

NG/FH: So right now what are the most significant democracy-related problems that are facing our countries? Hasn’t deregulated, globalized capitalism in fact forced democracy back on the defensive across the board?

Merkel: I would agree without hesitation. Led and pressured by the United States, the democracies have removed most of the boundaries that used to restrain capitalism, and they have done so consciously and negligently. This is the case in both a spatial and substantive sense. By deregulating markets, especially the financial markets, democracy has emasculated itself. When it comes to crucial issues of monetary, budgetary, and tax policy, it is the powerful investors, banking crises, and supposedly practical constraints that are setting the tone, not democratic majorities. In point of fact, democracy has become more market-conforming. But if one wants to risk greater democracy, one has to turn the tables and finally make markets (again) conform more fully to democracy. Looking at the big picture, it is true that democracy has made progress in some areas such as minority rights, gender equality, and tolerance toward the »other«. But there have also been setbacks in the areas of democratic control over the economy and the creeping exclusion of the lower social strata.

- - - -SNIP - - -

NG/FH: What strategy would you consider most promising as a way of making good on the claim that democracy should have primacy over the economy? And how might we effectively re-imbed or socially domesticate capitalism? Or, how would you describe a realistically attainable, morally defensible relationship between capitalism in the financial markets and parliamentary democracy, one that would work under today’s conditions in individual countries as well as the EU?

Merkel: First of all, let’s be clear about one thing: In the long run, deregulated markets destroy themselves and the social cohesion of our society. The spirit of the European Union cannot be defined primarily in terms of its Competition Law. Nation-states must refuse to cede competencies to the EU as long as the latter has not established democratic standards comparable to those of its member states. That is not anti-European; it is pro-democratic. Financial markets must be subject to stringent controls. It is pointless to wait in the hope that the United States or Great Britain might go along eventually. We have to see what can be done on a national level and, if need be, on the European level.

Last but not least, Germany must invest extensively in education, especially for young children from the lower classes. Such an investment would furnish particular legitimacy to additional taxation imposed on the rich and super-rich. Without a strong and just taxing authority, there is no way to create a fair society. Social democracy should be more courageous and tackle the distribution issue more energetically before the latter gets out of hand and becomes an insoluble class issue.

- - -

This interview was first published by the international edition of the Neue Gesellschaft/Frankfurter Hefte