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U.S. | Labor & Workers

The Elite Look Down on Democracy
by Jens Berger and Hans Springstein
Wednesday May 15th, 2013 4:24 AM
The thought-models of the economy have conquered practically all other social sciences. The person in these models is a homo oeconomicus, a rational agent whose only drive is maximizing his benefits. In this view of the person, only an action with the driving force of egoism is rational. The rational action of individuals who must sell themselves on the labor market has an irrational moment. People carry out repressions that they cannot see because of the irrationality of the whole. The conservative editor of FAZ caused a sensation when he said "the left may be right."

by Jens Berger

[This book review published on February 19, 2013 is translated from the German on the Internet, http://www.nachdenkseiten.de/?p=16222.]

In his new book “Ego – The Game of Life,” Frank Schirrmacher, co-editor of FAZ (Frankfurter Allgemeiner Zeitung) newspaper, casts a revealing glance at the operating system of capitalism. Schirrmacher sets the software of this operating system in the center of his reflection. This software is built on the model of egoistic persons, steers the linked markets of the financial system and is already dissolving democracy. Hopefully Schirrmacher's book will arouse further discussion on the nature of modern capitalism. We can only change the operating system when we understand it.

This book is based on a single thesis, that of “economic imperialism.” This means the thought-models of the economy have conquered practically all other social sciences and rule them. What did Angela Merkel mean when she spoke of “market-conforming politics”? To understand what is “market-conforming,” we need to understand what markets are how they tick. The notion of loudly gesticulating stock brokers shouting their orders belongs to the past. Today super-computers interact in nano-seconds. They buy,m sell, exchange, manipulate and test their counterparts – or – in a word – play. “Ego – The Game of Life” focuses on this game, its players and its rules.

The foundations of the rules of the game are mathematical models, more exactly computer code based on algorithms. The person in these models is a “homo oeconomicus,” a “rational agent” whose only drive is maximizing his benefits in the sense of egoism. In this view of the person, only an action with the driving force of egoism is rational. The “rational agent” is the core component of “play theory,” a mathematical model where several players oppose one another on the basis of “rational” that is selfish motives. The rational agent is the foundation of neoclassical and neoliberal economic models.

Schirrmacher's journey into the world of algorithms began in the 1950s when the US redeveloped play theory as an action model for the Cold War in think tanks like the Rand Corporation. As we all know, the US won this game. After the end of the Cold War, the think tanks of the military-industrial complex operated with intricate play theory algorithms and highly specialized physicists and mathematicians whose play-field was lost.

After the Cold War lasting 50 years, we find ourselves after the end of communism in a new Cold War between democratic nation states and globalized financial market bodies. - Frank Schirrmacher

Many of these researchers found new jobs in the 1990s with the booming investment banks. The financial markets were the new play theory battlefield on which much more money could be earned. So mathematicians and physicists [the programmers of the trade algorithms of Wall Street are called “rocket scientists” today.) developed the algorithms determining trade on the financial markets today on the basis of the play theory of the Cold War. Thus when we speak today of “the markets,” we speak strictly speaking of the result of a game whose players act on the basis of pre-given algorithms that transfigure the egoism of the acting subjects as “ratio” and make it the sold driving force of human action.

The problem is that theory forces action and doesn't only describe action. It is normative and not only descriptive. It produces egoists and doesn't only postulate them. - Frank Schirrmacher

Only those who act strictly “rationally” - that is egoistically – win in the complex game of the financial markets. Schirrmacher's criticism starts here. His book focuses on the question “whether the doctrine of `rational self-interest' as rational egoism does not produce pure madness?” Whoever looks at the events on the financial markets must answer in the affirmative. This goes beyond sub-prime credits, Lehman, HRE and Greece loans. Rather crisis is the normal state on the markets. In the US, a share is held today for twenty-two seconds on average. Four years ago they were held for two months. Between 2006 and 2011, there were almost 19,000 ultra-fast and completely unexpected events on the stock market. Instability is the rule, not an exception or black swan.

The crisis is only a symptom. The instability of societies where markets and people are organized as “homo oeconomicus” demonstrates this. In my view, the first case of a system-failure is the information economy. - Frank Schirrmacher

Is there really a system failure, as Schirrmacher writes? Or is this alleged failure not the next stage in the great game over money and power? If sub-prime credits and credit-derivatives were important yesterday, whose national economies are central today. The system has not failed; it has more power than ever. Society is clearly the loser since every player was declared system-relevant.

Even if Schirrmacher's thesis of the system failure of the information economy cannot withstand a careful scrutiny, he recognizes where the journey has gone since the financial crisis. The players and the engagement have changed since the beginning of the crisis, not only the playing field. If financial institutes earlier played against one another and the state stood by and watched the bustling activity, nation states today are driven more or less involuntarily into the role of players or members of the cast. Elected governments no longer determine the fate of whole national economies today. Rather our fate is engagement in the big game whose rules have not changed since the beginnings of the Cold War.

Citizens and the state do not have sovereignty any more; they only “play.” Therefore parliaments become facades or big shams and the general public becomes an echo chamber addressed to influence markets. - Frank Schirrmacher

Thus a “market-conforming” politics is a politics that accepts this game and submits to the rules of the game. No place is left for the person as a person in a world where the neoclassical picture of “homo oeconomicus” is the essential element of the rules of the game and egoism is declared rational action. Rather the “new super theory” that according to Schirrmacher is a complex of neoclassical and neoliberal economics, Darwinism and computer technology, that threatens to become a new totalitarianism.

Frank Schirrmacher deserves respect and acknowledgment for identifying the excesses of modern capitalism... Criticism of the excesses of modern capitalism, the dogma of efficient markets and the premise that egoism is the crucial driving force of human action are both leftist and conservative. When politicians and editorial writers who see themselves as conservative refuse to admit this, this is because they are not really conservatives but rather market liberals who long ago threw their values overboard. As a result, it is a great gain for the debate culture that this very important debate was kindled by the conservative thinker Frank Schirrmacher, not by a “leftist.” Leftists and conservatives must really have the same answer to the question whether algorithms or elected politicians should decide over our future.


by Hans Springstein

Whether “daring less democracy” wouldn't be better has long been discussed in political and philosophical circles. This debate continues along with the crisis.

[This article published 4/08/2013 is translated abridged from the German on the Internet, http://www.freitag.de/autoren/hans-springstein/die-elite-blickt-auf-die-demokratie-herab.]

“I don't believe any more that democracy in the form of “one person-one vote” is the best way of organizing a political system.” So the philosopher Daniel A. Bell was quoted by Spiegel Online on April 8, 2013. He is a Canadian and teaches at an elite Chinese university. On his homepage, he describes himself as a “Confucian philosopher and scholar.”

That reminds me of another “leading thinker.” Ten years ago Farced Zakaria proposed less democracy. “Liberalization,” according to Zakaria's thesis, comes before “democratization,” we read in the Neuen Zuricher Zeitung newspaper. In the name of the “order of freedom” realized in the long term, he seems to give a kind of carte blanche to some dictators. Zakaria has a good word for Lee Kwan Yew, the former prime minister of Singapore and even Augusto Pinochet. Zakaria praises China and its power system. “He feels sorry about the loss of a political culture in which the elite of the American east coast guide the fate of the country or even the world in a far-sighted way behind closed doors.” That is one of the reasons why Zakaria's theses were often criticized while the elite liked hearing him.

The “dare less democracy” thesis goes down well in view of the present crisis. The actions of the governing and rulers of the leading western states who agree with Zakaria and Bell hardly promote democracy. Colin Crouch stresses this in his “Thesis of Post-democracy.”

Understandably the rulers are occupied with ways ou8t of democracy propagated by their political system and media to secure their rule. The growing indignation of the rulers is one of the consequences of the crisis caused by them. “According to a study of the International Labor Organization (ILO), the economic- and monetary crisis increases the danger for social unrest in the Mediterranean states Cyprus, Greece, Spain and Italy.” This was declared April 8, 2013. The UN organization ILO “urges an about-face to a jobs-oriented policy in the EU to combat the dramatic jobs crisis with more than 26 million unemployed in the region.” “Young and low-skilled employees are very strongly affected,” the organization insists. “Long-term unemployment in large parts of the region has become a structural problem. In all 19 EU states, more than 40 percent of the unemployed have been jobless for more than a year.” One consequence of the deteriorating labor market situation is “that the risk of social unrest is now twelve percentage points higher than before the outbreak of the crisis.” High youth unemployment and other social problems were causes for the disturbances in North Africa and Arabia. According to the ILO, the potential for disturbances has only decreased in Germany, Belgium and Finland.

Thus the ruling elites in Europe have reason to reflect how they can ensure their rule without democracy. Germany always profits when others become poorer.


Oberham -

We have long lived in post-democracy!

Seen globally, the social pyramid offers a spectrum from the completely hopeless individual who dies of thirst at his mother's breast, the common pragmatic person who drudges through life as a pariah or disappears from consciousness in young years as a sex-toy, organ donor or child soldier to oligarchs who soar over all legal norms with their billions like feudal demigods.

Reduced to nations, the variety in so-called highly developed countries is often only slightly less complex. In the US a poor colored person when caught three times for shoplifting could spend his whole life in the slammer...

On the other hand, financial fascists can do or ignore whatever they want. They are practically never called to account – managers, top-flight politicians, the whole sub-plutocratic service trade, the lower aristocracy and the high aristocracy or multi-millionaires.

Votes are completely irrelevant where a pseudo-democracy is celebrated since the persons to be elected act in the interest of the upper class, not the voters...

Persons like Zakaria and Bell are not seminal thinkers. They redefine (verquasen) reality with their theses. Persons like Sandel, Crouch and Hedges appear as warners and admonishers while pocketing their Judas-dollars as marionettes for the establishment.

Globally the person is handed over almost hopelessly to arbitrariness, not less cruel and anti-social than in past centuries. In Germany, we live simply in a social honeycomb of relative-theoretical freedom of decision and come-of-age existence. Whoever decides to participate in consumption- and career-games is practically deprived of his/her rights in our latitudes since he adjusts his individuality to circumstances.

In the case of the privileged, one lives out his anti-social streak irrelevant in whatever part of the earth. One then only needs to adapt to the cynicism level of the local climate so the social entertainment system takes effect.

My advice, read as much as you possibly can. One shouldn't forget one's own head!....

People who accept me as I am and whom I can accept as they are, to meet, speak, exchange, make music, play and love – that is the most beautiful thing in life!

How can one communicate one's spirit as a teacher, doctor, lawyer or scholar with a pure conscience to the systems ruling on this world???

In my view, the only way is the absolute reduction of harm...


What can a democratic system accomplish in capitalism?

“People are means of reproduction, not its goal in the capitalist production- or reproduction process. Their needs are only satisfied when they serve capital. When people are satiated by products, this serves their (physical) self-preservation but is not really intended. Whether bombs or bread are produced depends on the likelihood of capital multiplication, not on human needs. People are forced to ensure their self-preservation by paid labor and consumption. They thereby perpetuate a mode of production that doesn't serve the satisfaction of needs. The rational action of individuals who must sell themselves on the labor market to survive has an irrational moment when these conditions are frozen or turn to stone” (Johannes Alberti, The “authoritarian character” and the presuppositions of ideology criticism in late capitalism).

Alberti concludes that “people constantly carry out repressions that they cannot see” because of the irrationality of the whole. Capitalism produces a “social veil” that hinders people from recognizing that “society is both its epitome and its opposite” (cf. Adorno, Theodor W.: On the relation of sociology and psychology, in: Collected Writings, vol.8).

An individual loses his living autonomy as a subject when forced more and more to adjustment by economic crises:

“Living persons must change the hardened conditions. However these conditions are so deep in living persons at the the expense of their life and their individuation that they seem hardly capable of that spontaneity on which everything depends” (Adorno, Theodor W: Collected Writings, vol.8: Sociological Writings, Frankfurt).