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State Indebtedness as a Power Strategy
by Moss Massarrat
Email: marc1seed (nospam) yahoo.com
04 Oct 2017
Contracting debts exploded under neoliberalism since the 1980s - unlike the state debts in the Keynesian era from the 1950s to the 1970s - and produced a structural debt bondange for the overwhelming majority. The financial sector arose parallel to the "indebted state."
STATE INDEBTEDNESS AS A RULE STRATEGY
By Mohssen Massarrat
[This article published on 9/27/2017 is translated from the German on the Internet, http://norberthaering.de. The author is a professor of politics and the economy at the University of Osnabruck. His latest book “Does the World Need a Financial Sector?” was published in German in September 2017 by VSA-Verlag in Hamburg.]
The neoliberal school often criticized Keynesian economic policy for causing higher state indebtedness with its credit-financed state spending and straining the economy. Reducing debts was the third pillar of the neoliberal strategy and an important postulate of neoliberal governments alongside the two pillars growth and employment. However, reality looks completely different. The debt rate of the big industrial states rose drastically from 1975 to 2013. This has a system.
In the US, the debt rate soared from 38 to over 100%, in Germany from 20 to 75%, in Great Britain from 20 to 85%, in France from 18 to nearly 100% and in Japan from 30 to 240% After four decades of neoliberal economic policy, the Keynesian state with its enormous spending in building the welfare state and rebuilding the infrastructure after the nationwide destruction through the Second World War had a significantly lower debt rate than the neoliberal state that wrote reducing debts on its banner and practiced a drastic social dismantling.
Indebtedness is a sensible mechanism for mobilizing social resources for increasing prosperity. It often led to bondage and slavery in history and gained a monopoly position. Over long periods, the credit-financed state spending policy in the Keynesian age contributed to increased prosperity and was even the main lever for mobilizing fallow resources. With the help of public credits, borrowers generated growth, repaid debts and even helped to higher tax revenue. But this productive course of money, employment and growth came to a standstill when growth reached its limits in the highly developed industrial states in the 1980s and this cycle stopped. Additional public credits could not lead to more growth and jobs or generate additional tax revenues. Logically the state indebtedness rose very slightly in all capitalist states at the end of the 1980s. Why didn’t those who wielded the club of rising state indebtedness the most vigorously against Keynesian policy break this development and instead even pushed it to excess? This happened despite systematic spending cuts in the social realm.
A glance at the taxation policy in the last decades reveals an important cause of the higher state indebtedness. For example, the long-term study of the French economist Thomas Piketty gave evidence that the top tax rates of the highest tenth of income groups fell from 98 to 55% and 52 to 35% between 1980 and 2015 in the US, Germany, Great Britain and France. According to the same source, the governments of these states practice a similar taxation policy at the beginning of the 20th century. In the first two decades of that century, those earning the highest incomes paid almost no taxes. The structural similarities between the two epochs, the time before the first 1929 world economic and financial crisis and the time before the 2008 financial crisis are amazing. But did the generously relieved rich and businessmen at least invest in the real economy and create jobs? Certainly not. Instead of increasing investment rates which could have been expected, these rates fell from 23 to 17.5% between 1980 and 2010 in the US, the EU and Japan.
In the past, higher state indebtedness was often instrumentalized as a bogeyman for attacking the social state. For example, the finance minister of the Red-Green German government (1999-2005), Hans Eichel, gave enormous tax gifts to big corporations and simultaneously began completely changing the social state and abolishing welfare state achievements one after another created after the war with the slogan state indebtedness is the “most anti-social thing” that ever existed. The increase of state indebtedness seems to have been the real goal of the government, not reducing state indebtedness. This inference is hard to resist. This indebtedness supplied a seemingly plausible pretext for social cuts. Secondly, the “indebted state” is simultaneously a state rigorously dependent on the rich elite.
The governments of indebted states never consider taxation of the rich for the purpose of budget revitalization while making spending cuts in the social realm seem self-evident along with shifting the costs of state indebtedness to the general public. The impoverished, alarmed and frightened population resigns to its fate either because it feels powerless after first becoming conscious of the swindle when everything has long been running and they see resignedly that it is too late to mobilize resistance or they really believe in the neoliberal narrative that a rich minority must become even richer so jobs arise and the poor majority must accept their poverty to prevent even greater poverty.
But a sober reflection shows that contracting debts under neoliberalism since the 1980s – unlike the state debts in the Keynesian epoch from the 1950s to the 1970s – produced a structural debt bondage for the overwhelming majority of the population. The financial sector arose not surprisingly parallel to the “indebted state” in most capitalist states. Under the auspices of the financial sector, the fiscal-, financial- and social policy of governments is dictated by the financial lobby and no longer controlled by parliaments. The financial sector has also suspended the democratic control mechanisms of state finances and developed into an enemy for democracy that should be taken seriously.
Is it now accidental that France’s new president Emmanuel Macron is imitating the mechanism “Tax gifts to the rich and increased state indebtedness” used in Germany and elsewhere? Up to 2022, the tax rate for businesses should shrink from 33.3 to 25% and the capital gains tax from 50 to 20%. Macron cannot be serious about investment incentives. French businesses are swimming in surplus profits given the dramatically lower wage-share from 65% in 1980 to 58% in 2015. But these profits are invested in the financial sector, not in the real economy. Therefore Macron on one hand may give tax gifts to businesspersons as happens in Germany. On the other hand, he will activate the mechanism for across-the-board social cuts and suspension of the legal 35-hour week set up successfully in Germany by lowering business taxes and higher state indebtedness against which social struggles get nowhere.
Budget revitalization through reducing state indebtedness and “justice toward the younger generation” are effective propagandistic “weapons” to break the expect ed massive resistance of many French persons against Macron’s project and stir up and divide the young against the old and the less resolved against the strongly resolved. The moral potential of these “weapons” is strong enough to bring a part of the working population to ultimately vote against their own interests. On the background of experiences from Germany, Great Britain and other neoliberal states, the swindle “Tax cuts for businesses and higher state indebtedness” must now be uncovered.
VSA Verlag Publisher: Summary of “Does the World Need a Financial Sector?”
The crisis since 2008 has proven the dominance of the financial market. Humanity is confronted with a new formation of capitalism. In any case, this capitalism is essentially different from the capitalism analyzed by Marx in his time.
In the classical analysis, power as an independent category was neglected. Nevertheless, it is central for understanding the history of capitalism and the present. The pathologically irrational accumulation of wealth of our time is the result of an incredible accumulation of power.
The author emphasizes the significance of power with the help of capitalist development since industrialization. He shows how much power as the hidden hand of the rich and dominant defines the content and organization of capitalist societies in their interest. Imperialism and finance market capitalism can be analyzed more precisely as results of the merger of power and the capitalist machinery.
While capital represents the basis of value creation, power like a central threat in capitalist history assumes the function of redistribution from the have-nots to the wealthy,. From the poor to the rich societies. In finance market capitalism, mass unemployment, the indebted state, social dismantling and wealth concentration are systematically instrumentalized under the direction of neoliberalisjm.
A class alliance of big businesses and owners of real estate and resources is painstakingly sought to keep all the governments of capitalist countries and global institutions under its control and to nip in the bud any reforms going beyond the system.
Mohssen Massarrat seeks ways out. How can finance market capitalism be overcome? What presuppositions must post-capitalist conditions fulfill so they are clearly superior to the capitalist conditions? What are possible ways of non-violent changes?
Facing a Possible State of Emergency
by Peter Schaar Monday, Oct. 02, 2017 at 5:12 AM
marc1seed (at) yahoo.com
The danger of authoritarian "solutions" grows when the constitutional state is dismantled, undermined or suspended. Basic western values were betrayed in the so-called "war on terror." All persons have the same inalienable human rights irrespective of nationality, origin or religion.
FACING A POSSIBLE STATE OF EMERGENCY
Interview with Peter Schaar
[This interview published on September 26, 2017 is translated from the German on the Internet, www.nachdenkseiten.de.]
The danger of authoritarian “solutions” grows when the constitutional state is dismantled, undermined or suspended.” This warning was made by the former data protectionist Peter Schaar who published the book “Deceptive Security: How the Fear of Terror Drives Us to a State of Emergency.” Schaar emphasizes the importance of protecting democratic controls of the state monopoly of force in times of terror. In the interview with NachDenkSeiten, the former top data protectionist speaks about the betrayal of basic western values in the so-called “war on terror” and the situation in France where the state of emergency has prevailed since November 2015. Schaar expresses the fear that the state of emergency could be applied in Germany with a serious terrorist attack.
Mr. Schaar, have the western states betrayed their basic values in the so-called war on terror?
After September 11, 2001, laws were rushed through not only in the US that massively restricted basic rights. In Germany, the German minister at that time Otto Schily pushed the Bundestag the so-called “Otto catalog” within a few weeks. Many of the legal restrictions resolved worldwide at that time without parliamentary review were long stored in the drawers of the ministries and had hardly any chance of a parliamentary majority. This changed suddenly with the attacks of September 11, 2001. Since then, we have had to make this experience again and again. New legal limitations and basic law restrictions always follow terrorist attacks like reflex actions. That even constitutional state guarantees constituting the core of the western-liberal set of values fall under the wheel is very serious.
In your book, you speak of a betrayal. What does that betrayal look like?
After the horrific experiences of the Second World War, there was a consensus in the international community of nations that all persons have the same inalienable human rights irrespective of their nationality, origin and religious affiliation. The “global war on terror” declared by president Bush right after the attacks of September 11 suspended these guarantees of human rights. The Guantanamo prisoner of war camp is the visible expression of this development. Since then, other states have suspended basic rights and human rights guaranteed by the Universal Declaration of Human Rights. For example, this is true for France where the emergency law has been in effect since November 2015. The French government declared to the European Council that France no longer practices the basic rights guaranteed in the European Human Rights Convention. Through this dismantling of basic rights, western states lost their moral credit. This dismantling undermines the credibility of human rights arguments worldwide. Those regimes and ideologies in which human rights play no role profit from that.
With what measures can the state counter the terror danger?
Basic rights are negatively affected on a broader plane. This is true for the freedom of the press, the right to demonstrate and the basic right to privacy. The security authorities and if necessary the military are ultimately given a free hand in the global anti-terror war. Secrecy of state activities, well-aimed disinformation and censorship, demonstration prohibitions and extensive monitoring are all in the tool box. Governments use these instruments in different ways. The rights of suspects are often not the only rights that are restricted. As can be seen in Turkey, the argument of fighting terror is used against all possible oppositional efforts and even against journalists that report about truths unpleasant for the state.
What does it mean for a liberal state when video surveillance is expanded and the police deploy body-cams and automated reading systems for recording motor vehicle characteristics?
More than 30 years ago, the German Constitutional Court said basic rights are impaired when an individual can expect monitoring by state authorities. This is especially true today given the increased surveillance. Therefore surveillance must remain the exception. The proportionality demanded by our basic law is also valid in times of terrorist threat.
Do you agree with the statement: The problem is the establishment of a regular surveillance infrastructure consisting of very different elements. The problem is not so much individual measures for monitoring citizens.
In this connection, some speak of a surveillance orientation. Every particular surveillance measure requires substantiation. But the cumulative effect resulting from different measures is very important: data storage, communication monitoring, video controls and so on. The total result can be unacceptable even if every individual measure taken by itself seems proper.
A state of emergency was declared in France after a terrorist attack, as you mentioned. This state of emergency has existed since November 13, 2015 and was renewed in June up to November 1.
What does the state of emergency mean and how can this situation be accepted?
The state of emergency is the most extreme divergence from the constitutional state normality. As in a war situation, freedom must stand back or take second place in relation to state security interests. The French example shows more than a temporary measure is involved and that the tendency of becoming permanent is inherent in the state of emergency. This is particularly true when the triggering factors – here the threat by international terrorism – continue.
Thus practically unlimited power is available to the government by imposing the state of emergency.
In any case, the state of emergency gives the executive additional power and weakens the parliamentary and legal controls. The separation of powers is not guaranteed any more.
In your book, you express the fear that the emergency law could be applied in Germany after grave attacks. On what legal basis could that happen and what would that mean?
The emergency laws implemented in 1968 by the Great Coalition make possible or legitimate the use of the military and the suspension of parliamentary control mechanisms in armed conflicts. The question is raised whether a German government could declare an emergency with military weapons after attempted assassinations as happened in Paris. Thus the state of emergency cannot be excluded in Germany.
In your book, you write that offenders (Trittbrettfahrer) could gain advantages from the terror fear.
“Normal “ criminals use the situation by organizing blackmails under the cloak of terrorism as happened in the attack on the team bus from Barossa Dortmund. The radical right-wing terrorist cell in the German army planned attempted assassinations that would be ascribed to political refugees or asylum seekers. How state posts apply the anti-terror struggle for very different purposes is very clear in Turkey.
What dangers does our democracy face in connection with the terror danger?
Democracy cannot survive without the constitutional state. The danger of authoritarian solutions grows when the constitutional state is dismantled, undermined or “suspended.” This is ultimately an existential question.
From the Constitutional State to the Security State
by Giorgio Agamben, April 2016 in Luxemburg 1/2016
The state of emergency is that arrangement by which totalitarian powers were established in Europe. Hitler’s first official act after his nomination (to Reich chancellor) was the proclamation of the state of emergency that was never retracted (during the NS rule). If one is amazed at the crimes committed with impunity in Germany by the Nazis, one forgets that these actions were absolutely “legal” because the land was subjected to a state of emergency and basic rights and freedom rights were suspended.
The security state is neither part of the constitutional state nor what Michel Foucault called the disciplinary society.. The security state is permanently grounded on fear and must keep fear alive at any cost because it has its essential function and legitimacy from it…
The three characteristics of the security state-maintaining a generalized state of anxiety, de-politization of citizens and renunciation on any legal certainty-should make us think. The security state to which we are moving does the opposite of what it promises. While security means the absence of worry (Latin sine cura – without worry – as the root for the French word securite), the security state foments permanent fear and terror. The security state is a police state that increases the police’s freedom of decision by suspending the power of the judiciary. The state of emergency that becomes daily routine and acts as the sovereign more and more becomes the normal case.
The security state breaks out of familiar politics to move to an indeterminate zone where public and private whose borders are hard to define become ever more blurred – through the increasing de-politization of citizens.
FROM THE CONSTITUTIONAL STATE TO THE SECURITY STATE
By Giorgio Agamben
[This article published in April 2016 in Luxemburg 1/2016 is translated from the German on the Internet, http://www.zeitschrift-luxemburg.de.]
What really is at stake in extending the state of emergency in France  can only be understood when this is set in the context of a radical transformation of our familiar state model. Firstly, the statement of an irresponsible politician that the state of emergency supposedly protects democracy should be rejected. History has shown that the opposite is true. The state of emergency is that arrangement by which totalitarian powers were established in Europe. So the social democratic governments  of the Weimar Republic often fell back to the instrument of the state of emergency in the years before Hitler's assumption of power. Germany had already stopped being a parliamentary democracy before 1933.
Hitler's first official act after his nomination (to Reich chancellor) was the proclamation of the state of emergency that was never retracted (during the NS rule). If one is amazed at the crimes committed with impunity in Germany by the Nazis, one forgets that these actions were absolutely "legal" because the land was subjected to a state of emergency and basic rights and freedom rights were suspended.
Such a scenario could be repeated in France. A rightwing extremist government can be easily imagined that makes use of a state of emergency to which the socialist government accustomed citizens. A fast and permanent damage of the public institutions can occur in a country under a permanent state of emergency where police operations increasingly replace the powers of the judiciary.
KEEPING FEAR ALIVE
This is all the more true when the state of emergency is part of a process where western democracies are changed into something that must be described as a security state. The word security has become a constant element of political discourse. So-called reasons of security (raisons de securite) replace what was earlier called the reason of the state (raison d' etat). An analysis of this new form of government is overdue. Reflections on a possible definition are important since the security state is neither part of the constitutional state nor what Michel Foucault called the disciplinary society. In the model of the Brit Thomas Hobbes that has greatly influenced our political philosophy; the social contract with which power is transferred to the sovereign presupposes mutual fear and the war of all against all. The state is the institution that ends this fear. This pattern is reversed in the security state. The state is permanently grounded on fear and must keep fear alive at any cost because it has its essential function and legitimacy from it.
Preventing catastrophes and famines was not uppermost when the word security first appeared in the political discourse in France with the Physiocrat governments before the French Revolution.  Rather these were allowed and were made themes of profitable government actions.
Security does not aim at preventing terrorist acts (which is extremely difficult if not impossible since security measures are only effective afterwards and terrorism by its nature strikes again and again in different ways). Instead a new relation between persons is produced that consists of a generalized and boundless monitoring. That is the reason for institutions that allow a complete control of the population's electronic and communication data including the complete copying of all computer data. 
The first risk consists in drifting into a state where terrorism and the security state enter in a symbiotic relationship. When the state needs fear to gain legitimacy, it has to provoke terror in the extreme case or at least not hinder its genesis. One only needs to consider the foreign policy of some countries that fuel terrorism which then must fought internally. When weapons are sold to these states, they become known as terrorist organizations.
A second point is the change of the political status of citizens and the people who were considered bearers of sovereignty. In the security state, an unstoppable tendency aims at an increasing de-politization of citizens. Their participation in political life is reduced more and more to inclusion in public opinion polls on the eve of elections. This tendency was all the more alarming when it was cast in theoretical form by Nazi jurists. They defined the people as a politically powerless element whose protection and growth had to be guaranteed by the state.
According to these lawyers, there is only a single method for helping this politically powerless element have a political effect: by referring to common origin and race distinguishing them from foreigners and enemies. The Nazi state and the contemporary security state should not be equated. When citizens are de-politicized, they can only be freed from their passivity and mobilized by the fear of a foreign enemy who is not merely external to them (this is true for Jews in Germany and for Muslims in France today).
UNCERTAINTY AND TERROR
On this background, the disgraceful bills on the decheance de nationalite (expatriation) for persons with double citizenship must be considered. The 1926 fascist law on rescinding Italian citizenship for "unworthy citizens" and the Nazi laws on expatriating the Jews should be recalled. 
A third point that may not be underrated involves the criteria according to which truth is produced today in the public sphere. A radical shift has occurred here...
The fact of a crime can only be officially ascertained in a constitutional state with the help of a legal procedure... Sometimes rumors and gossip seem more important than serious findings. The security state has an interest in keeping people in uncertainty as to what threatens them. Uncertainty and terror go hand in hand.  The security state has to ensure their security.
The legal text of November 20, 2015 that established the present state of emergency in France is marked by vagueness.  Special arrangements are in force for "any person whose conduct represents a threat for public security and order." This arbitrariness could refer to any person at any moment. In a security state, vague targeted formulations become the norm even though they are always criticized by lawyers as violations of the principle of legal certainty.
DE-POLITIZATION OF CITIZENS
The same vagueness and the same ambiguities mark statements of politicians who say France is "at war against terrorism." The talk of a "war on terrorism" is a contradiction in itself because the state of war includes identifying a combative enemy. In contrast, the enemy must remain oblique in the security state so whoever can be defined this way - internally or externally - doesn't matter.
These three characteristics of the security state - maintaining a generalized state of anxiety, de-politization of citizens and renunciation on any legal certainty - should make us think. The security state to which we are moving does the opposite of what it promises. While security means the absence of worry (Latin sine cura - without worry - as the root for the French word securite), the security state foments permanent fear and terror. The security state is a police state that increases the police's freedom of decision by suspending the power of the judiciary. The state of emergency that becomes daily routine and acts as the sovereign more and more becomes the normal case.
The security state breaks out of familiar politics to move to an indeterminate zone where public and private whose borders are hard to define become ever more blurred - through the increasing de-politization of citizens. This article first appeared on December 23, 2015 in the Le Monde journal.