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Casino Capitalism and Profit Maximization
In the 1960s the average holding time for stocks was 10 years. Now the holding time is not 9 months but 22 seconds. Like shareholder value, profit maximization leads to exploding inequality and the waste of resources. States were weakened by extensive tax cuts. How can the economy serve long-term necessities (e.g. affordable housing, education and health care) and not only short-term profit maximization?
CASINO-CAPITALISM AND PROFIT MAXIMIZATION – DANGER FOR DEMOCRACY AND SOCIETY
By Gunter Grzega
[This “political Ash-Wednesday” address presented on March 5, 2014 is translated abridged from the German on the Internet, . Ash Wednesday is really a day of reflection on our transitoriness. Perhaps the politically powerful in Bavaria should show some humility on this day for mistakes committed over the past 12 months.]
Ladies and Gentlemen, dear guests, have I misunderstood something or is something self-critical happening in Passau? Have you heard anything of humility or self-criticism in the Ash Wednesday events in the last years? Do the majority of deciders of the Christian parties act according to the Christian public interest theory? Do the majority of deciders of the Social Democratic Party really act socially in a public interest coordination?
As a former bank manager, I belong to the so-called higher-paid and profiteers of the neoliberal ideology. Nevertheless I am engaged in the “Initiative Wealthy for a Property Surcharge” and for a chance to an eco-social market economy oriented in the public interest. I do not do this for ethical-moral reasons or to be categorized as a “good person.” One important reason is my selfish claim to life. I am convinced a permanently great unfairness in sharing prosperity is revolutionizing society. I would be very negatively impacted by an uncontrolled destruction of the social- and economic order.
This excerpt from the Bavarian constitution should be hung over the speaker’s platform.
(1) All economic activity should serve the public interest, particularly the guaranteeing of a dignified existence for everyone and the gradual increase of the standard of living of all sectors.
(2) The economic freedom of individuals is limited by regard for the neighbor and the moral demands of public interest. Immoral legal transactions and transactions damaging the community, particularly all contracts for economic exploitation, are illegitimate and void.
Can this constitutional instruction be implemented and fulfilled? Don’t we have to recognize we are no longer living in a socially and ecologically organized market economy? We are living in a dangerously massive social inequality, in a financial casino with a profit-maximization ideology oriented in the top tenth of society. This ideology is beginning to destroy our democracy and society. I will prove this with numbers and facts in the course of my address and not simply rely on a gut feeling. By the way, our German chancellor supports my thesis with her demand for “market-conforming democracy” in contradiction to the Basic Law and the Bavarian constitution. Thus the “market” should become the new sovereign and take over power in the state.
Ladies and gentlemen, this casino capitalism obviously did not come over us “over night.” No, an ideology underlies this casino-capitalism which connected with the names Reagan and Thatcher spread worldwide slowly and insidiously since the 1980s by the US and Great Britain – the neoliberal economic ideology. According to my understanding, this primitive ideology starts from its simple model that a largely unregulated market brings the best economic results and that the promotion of egoism and profit-maximization of the strong in our human society increases prosperity for everyone. Milton Friedman and his “Chicago Boys” could be named here as “intellectual fathers.”
If this is a naïve theory and ideology, how could it be carried out? Hasn’t history shown again and again that people without commands, prohibitions and rules destroy their societies? Do none of the current elites in politics and the economy remember that every world religion and the non-religious moral philosophy rightly demand sanctioned rules for society? Is it really so hard to understand that a successful society needs sanctioned and generally valid economic rules since relatively simple road traffic needs a comprehensive rule system and penalty catalogue? Hasn’t road traffic functioned best with the use of human reason as in the neoliberal economic ideology? “All traffic actors have to act that way…” The cemeteries in Germany would experience an economic boom on a day without any traffic laws, without speed limits, without street lights and without zebra crossings trusting completely in human reason. A simple discovery is hidden behind this system of market-trustfulness: the market in this ideology plays in the interest of the powerful and wealthy and these people as a rule do everything to prevail even if it is ultimately the wrong way for them – from a long-term perspective.
This game of unquestioning market faith has shifted more and more in the last 20 years from the real economy to the finance economy. The super-rich and the powerful were and are intoxicated with ever-higher profit demands of 8 percent and more on their invested money. This demand can never be fulfilled by the real economy with an economic growth from 1 to 2.5 percent. However the actors on the financial market only felt competent if they were given a free rein on their profit claims. Ever faster and more extensively politics fulfilled the desires of market radicals and largely liberated the financial area from regulations and supervision. The financial casino was opened!
Let me illustrate several aspects of this casino… Normally the DAX (German stock exchange) development – outside of a crash – is only marginally involved with the real economy. Why is this gambling casino given the best broadcast time when only 7 percent of Germans invest directly or indirectly in stocks and take part in this betting? Should this not be called grotesque when broadcast on a public television? Is it a veiled and unpaid advertising for participating in a lottery of the financial markets or is it an ideology? I think the latter is the better explanation. To citizens it is suggested: this is the economy! No, ladies and gentlemen, this is a struggle over betting profits between members of financial oligarchies with licenses or permissions for mini-bets by private parties and has little to do with the real economy in boom- and normal stock market times. Developments of the last 2 years show this very clearly. The real economy grew 1.5 to 2.5 percent and the DAX soared 30 percent in 2012 and 25 percent in 2013. Stocks are gambling chips… Only the short-term profit counts. The quarterly-number fetishism befuddles the greedy brain of the profit maximizer. One could think these profit maximizers and their little stock exchange games hardly touch our real economy. Unfortunately a crash comes inevitably with this game on account of the so-called “bubble formation” and this enormously affects the real economy. Why is that? The stock crash leads to balance-recessions for businesses engaged in the stock market and above all for banks and insurance companies that lead to business bankruptcies. The people who now lose their jobs had nothing to do with this speculation-bubble but pay for it.
Banks must be bailed out with tax funds. The taxpayers had nothing to do with speculation but pay for it. If healthy businesses as stock corporations suddenly lose their firm’s assets through the crash without reason, they could now be bought cheaply by the “grasshopper funds.” Then the valuable parts of firms with high profits will be sold off cheap and the rest driven into insolvency. Many persons lost their jobs although they had absolutely nothing to do with the stock crash. This obviously necessitates higher social spending for our state and simultaneously declining tax revenues through the firm bankruptcies and the rising unemployment. This strange casino “exchange” strikes again and again. A few stow away the profits while the crash losses are mainly borne by the 90 percent of non-participants. On account of the Ukraine-Russia crisis, the current stock exchange scenario has to do with the real economy to a certain extent, namely with the stock prices for the businesses engaged in these countries. At the same time gigantic sums were withdrawn from normal state e3xchanges so fraud could be committed on other playgrounds of this crisis, for example currency speculations, raw material speculations and others which do not correspond to real economic transactions but can strain them intensely…
In 1980 stocks were held for an average 10 years. In 2012 the time amounted to only 9 months. In computer-guided high-frequency trading on US stock exchanges, the average holding time is only 22 seconds.
Trading with stocks and socialization of crash losses dominated the gambling casino. Every genuine gambling casino in Bavaria works ethically and justly.
What should be done? I am not a great friend of prohibitions and see these as only a last remedy.
Corresponding to Article 151 of the Bavarian constitution and the Basic Law (Art. 20: Property obligates), the public interest and the fair participation of all citizens – also called distribution justice – must be sought with profits. Participatory fairness in the total proceeds of an economy is always central.
How can this be achieved?
1. The consistent introduction of a comprehensive financial transactions tax – even on high-frequency trading – largely stops the business of financial betting outside real economic demands.
2. Analogous to the inheritance tax rules for real estate with the 10-year holding time for gaining full inheritance tax exemption, trading profits on the stock exchanges should be taxed in the first year after sale of the stock at 90 percent, 80 percent in the second year and 70 percent in the third year. The profit is tax-exempt after a 10-year holding period.
We would immediately have a genuine culture of business partnerships in the original sense and the casino would dry up by itself…
Let us now speak about the greatest danger for the economy and society – the “world financial system” casino, the financial transactions or better financial bets by global financial groups, big banks, shadow banks and hedge funds.
What happens here and why is this so dangerous?
Let me briefly discuss the 2007/2008 crisis situation when the world financial system was on the verge of collapse and without state bailout actions could have dragged our real economy into the abyss.
The following causes are valid to a more extreme extent than in my explanations on the stock market casino: 1. the de-regulation or unleashing of the world-financial markets. 2. The dismantling of control instruments in the monitoring authorities that we inadequately equipped. 3. The unconditional belief in the rightness of striving for profits, profits and profits for the strong of society, the top 1 percent or more generously the top 10 percent. These points started the time-fuse of a financial market crash. Every critical observer of the developments of the history of the 1930s must see that the greediest and most ruthless financial players and their clients began the dance around the golden calf here without ethical and moral hesitations. One doesn’t need to know one’s Bible to recognize the destructive consequences of turning away from all morality in striving for possessions. The explanations and theses of the moral philosophy of the Enlightenment are enough. From his or her own conscience, every person not mentally impaired must sense that a strategy oriented in greed and boundless selfishness has no future though it may be successful in the short-term. Nevertheless the majority obviously are not aware what game was played here and unfortunately will be played in the future.
For me it is really oppressive to see that a majority in the mainstream media, regardless of whether in the print media or TV, will now adopt and spread the neoliberal theories unreflectively. For5 me it is also clear that a so-called “truth” implemented in a brainwashing process over many years can hardly be questioned and changed any more until the inevitable “super atrocity” forces rethinking. The present situation is strongly reminiscent of the manipulation model in the novel “1984” – written in 1948 by George Orwell – where his so-called “newspeak” is applied perfectly. Top politicians using the word “reform” can immediately make us ice-cold. A term that was once very positive usually means the following today: dismantling the social state and civil rights. “Without alternative” is also an Orwellian language manipulation. However Orwell was mistaken in one theme, the extent of the surveillance of citizens. In his novel, he assumed several areas of life would be protected from spying. If he would experience the revealed methods of the NSA and other secret services, he could only be incredibly astonished that unlimited spying methods are reality today and not science fiction.
But back to the 2007/2008 great crisis.
Many so-called experts believe or publish that the real estate bubble in the US was the cause of the 2007/2008 world financial crisis. Certainly it is incredible that real estate could be bought “on credit” without a dollar of their own resources in the United States from the beginning of the 2000s, often when one was a low income person or even unemployed. The only security was the wealth increasing on paper from the mounting house prices on account of the real estate boom. The lenders or financial institutes were always cited on the balance sheets of securities for the nearly unlimited construction loans. Every interested person knows this story today. In addition the increased money amounts of the American central bank – the FED – is often cited as a support. However that does not explain why the world financial system faced disaster. The analysis why the collapse of the US housing market endangered the world financial system and led to a worldwide state bailout of bank- and insurance groups with gigantic amounts at the expense of citizens showed the true cause. It was the transformation of the financial branch from a service provider of the real economy to a deregulated and nearly unsupervised gigantic financial casino that separated its affairs nearly completely from the real economy.
I’d like to apologize for my term “casino” – to genuine casinos. Real gambling casinos are absolutely fair and publish the chances and risks unvarnished, the profit-loss relations. The technical instruments and tools of gambling casinos are adjusted and the operation is strictly controlled and monitored. The world financial casino also has a considerable share of “coordinating players,” that is cheats who hardly give a real chance to the customers. How can we otherwise describe the uncovered manipulations of referential interest-rates and similar intrigues by the money-changers of the financial groups? They are coordinating gamblers to the burden of the general public!
The possibility of selling boundless greed as a substitute religion, as a legitimate and socially recognized strategy first allowed a system of inscrutable financial products and its implementation in the world financial system. Structured credit-securities in which American homebuilder-junk credits, valuable real estate credits and other loan charges were packaged together into negotiated guaranteed securities and were traded and sold worldwide like stocks or bonds are the best known examples. As a rule, these securities were given the highest grade “triple A” by the world’s largest rating agencies up to a few days before the crash and treated as safe investments free of risk. Most of you know the CDS securities, the credit default swaps, as negotiated insurance slips or betting chips for bets on worsening creditworthiness, bankruptcies – even of states – or creditworthiness improvements. What is grotesque is that you can buy these insurances without owning the securities underlying this insurance. It was as though you bought a fire insurance policy on your neighbor’s house in the hope that this house would soon burn down and you could rake in the insurance sums. The more people bought fire insurance on their neighbor’s house, the greater the likelihood that their neighbor’s house would actually burn down. Was that any different with arsonists in the Euro crisis?
In every newly structured financial creation, the actors of the world financial mafia did everything in their power for the so-called derivatives, securities on securities. Incidentally one of the most powerful financial investors of the world and a billionaire George Soros said clearly and unmistakably: “Credit derivatives are financial weapons of mass destruction.” That these financial bets in large part are credit-financed, that is leveraged – “hedged” in financial language – made possible profits to betting winners in double or triple digits for invested capital – led to ever greater greed and naive belief in the new alchemists of our world – the financial managers. One could effortlessly make more money out of money almost without risk. Unlike the medieval alchemists, the financial managers did not promise the creation of gold out of iron.
Now people are beginning to discover that this dream of boundless multiplication of money was impossible without the effect and participation of the real economy. The risks ultimately had to be accommodated on the balance-sheets of real businesses – even if often hidden in conduits. People are now beginning to discover the causes of the system crisis. The far-reaching deregulation of global financial transactions, the nearly unlimited approval of shadow banks like hedge-funds, private equity funds – better known as grasshoppers – and conduits and so forth, outside the regulated exchanges and betting firms traded over-the-counter (OTC) are the time-fuses of the system crisis. Other time-fuses are the branch offices of financial groups as post office box firms in tax havens without any duty to disclose information and thus without any timely intervention possibility for malformations endangering economies.
The following numbers make clear this dangerous state of the world financial system:
The gross domestic product of the whole planet amounted to $70 trillion in 2012; the value of the shadow banking system was estimated at $100 trillion;
The value of the OTC-derivatives was estimated at 10 times the world’s GDP, $700 trillion, in 2012. Can this be called anything but madness! [Davide Fraschi, Imre Kondor, Mateo Marili: Study “The Interrupt Power Law and the Size of Shadow Banking,” published September 16, 2013]
Should we be surprised that the world is ruled by financial groups when a non-financial business first appears in 44th place of world firms, namely General Electric?
By the way, insane bubble formations occur again and again in an unbridled unregulated financial system. The last gigantic bubble on the US housing market arose indirectly out of real assets. But the longer history has an even more insane example, the financial bubble in the tulip-bulb trade; 50,000 Euros were paid per bulb for rare tulip bulbs on the commodity exchange according to today’s exchange rates. The first speculators wanted to make profits on a large scale through excessive sales of their bulb contracts. A complete market breakdown occurred as with the US housing crash.
We don’t need to contemptuously smile about the dumb tulip bulb speculators. A similar madness is now taking place in a little market segment, namely the art trade.
At a recent auction in New York, $120 million was paid for the painting “The Cry” by the painter Eduard Munch who was certainly plagued with a sickness of fear.
Now back to present-day reality. Were lessons learned from the 2008 financial crash? No lessons were learned, from my perspective, except for several cosmetic corrections!
No fundamental re-regulation of the financial markets was carried out.
Allow me several proposals that are also urged by other critics of the financial casino:
1. Prohibition of derivates that do not help safeguard real businesses, for example of commodity-futures trading.
2. Approval of new financial products first after examination of their harmlessness and purpose or function – that is previous testing by a financial consumer protection board as is in force worldwide for approval of new technical equipment.
3. Regulation and ultimately removal of the shadow banking system.
4. Drying up of tax havens.
5. Introduction of a financial transactions tax covering all financial transactions including exchange transactions planned in Germany and several other European countries. This is only eyewash. That my manager colleagues of financial groups resist an all-embracive transactions tax is easily understandable when the real backgrounds are considered. Genuine transparency is crucial here. All of a sudden politics, financial supervision and the central banks would know exactly where, by whom and on what scale casino financial transactions are carried out. The central banks do not know now for example how the European Central Bank shifts derivative businesses daily around the globe and depends on ratings. They cannot intervene on time in the financial markets and must wait relatively helplessly until the next crash reveals these dimensions in money-bets.
6. My main proposal is the return of banking systems to their most essential tasks as service-providers of the real economy – namely risk management, capital allocation for the money of savers, making credits available and operation of an efficient payment system.
A bank as a stock corporation cannot carry out its original task to do what is best for the customers since the neoliberal ideology is focused on shareholder value diction, the absolute priority of profit maximization for owners of capital. Whoever calibrates to the advantage of owners of capital cannot simultaneously strive for the best customer orientation. Whoever argues something else is deluded or deceived.
According to my proposal, banks may only act as legal-public credit institutes, cooperatives, non-profit businesses or as public institutions of public law. Insurance companies also should not be allowed in the legal form of a stock corporation since everything is attempted to resist the insurance claims of members to catapult dividends for shareholders and bonuses for management higher and higher. In the claim, the best solution for the insured is very often not in focus. To me the legal form of the “insurance association to mutuality” was and is the most suitable legal form for well-balanced safeguarding of interests of all participants.
Let me now discuss the last point of my Cinderella idea. It is not only the financial casino alone that casts democracy and society into the abyss. No, the real economy unfortunately also leads into the abyss. In the last decades, the real economy has obviously developed into a battle between poor and rich through the neoliberal ideology…
One of the richest men of the world and a billionaire, Warren Buffet, even described it as a “war of the rich against the poor.”
More and more he recognizes everyone will lose at the end of the war.
Here are Warren Buffet’s statements in the course of several years:
In 2005 Buffett still spoke about the struggle: “Class struggle prevails. My class is winning but it shouldn’t be winning.”
In 2006 Buffett spoke of war: “Class war rules but it is my class, the class of rich, that wages war and we are winning.”
In 2011 Buffett admitted self-critically: “My friends and I have been coddled long enough by a billionaire-friendly Congress.”
Not only one or several super-rich recognize the seriousness of the situation for society. Other world personalities point to this will great clarity.
I am not an enthusiastic follower of the church hierarchy but the new head of the Catholic Church, Pope Francis, has my admiration for his statements on our current economic system. It has been a few centuries since a pope has criticized an economic system so publically and unmistakably.
At the beginning of my closing statements, let me present the first quotation from his recently published apostolic letter “Evangelii Gaudium”:
“The worship of the ancient golden calf has found a new and merciless form in the fetishism of money and in the debate of an economy without face and without a real goal.”
A church official was not alone in referring to the dance around the golden calf – a false idolatry. One of the so-called economic wise, Professor Peter Bofinger, who always seemed to me as a “minority voter” in the horror cabinet of the neoliberal council of economic experts of the German government said:
“Money has replaced religion for many.”
I will not enter into details in this theme of the fundamental malformation of the economy through the profit maximization ideology. That would go beyond the scope of this event. I will only emphasize that the overwhelming majority of citizens of the industrialized countries of this earth and thus also of Germany are brutally deceived to the advantage of a few.
1. The statement “Germany is prospering” is the best brainwashing tactic in the Orwellian language framework. The statement “50 percent of Germans are doing well and 10 percent are flourishing” would be correct. Unfortunately the other 50 percent are going downhill. This can be proven simply and plainly in the development of income and assets.
Let me first analyze the development of asset distribution that was researched by DIW Berlin for the years 2008 to 2012 and published a few days ago. The basic tenor is that the situation in Germany in no way improved from 2002 to 2007. In the meantime we are the taillight in Europe. In the years 2002 to 2007, the lower 50 percent of Germans possessed between 0.00 and 1.3 percent of all assets in Germany or had debts. In 2007, 57.9 percent of all German net assets belonged to the top 10 percent. This gap has even expanded further. The top 10 percent possess over 60 percent of the assets, nearly two-thirds. This is a logical consequence of a neoliberal economy!... The top 10 percent register an enormous leap upwards. At the same time the poverty risk rate in Germany rose in this decade from 11.2 percent to 15.7 percent of the population.
2. Consider the statement: “We must tighten our belts because we have lived beyond our means.”
Strangely enough, the total assets in Germany have increased uninterruptedly in the last years. What is veiled here? Very simply, the following statement would be correct: “The assets of the banks, insurance companies, funds and super-rich were bailed out in the financial crisis with billions of tax funds of all citizens. These fraudsters have lived above their means and should tighten their belts to make amends as compensation.”
3. Consider the statement: “The social state cannot be financed any more.” The following statement would be correct: “The state is consciously weakened to speed up the redistribution from bottom to top because that corresponds to the dogmas of the neoliberal ideology.”
Our state was systematically weakened in the last 15 years by extensive tax cuts. I remember the lowering of the top income tax rate for people like myself from 53 percent to 42 percent now, to 45 percent for those with an annual income of 250,000 Euros and through tax cuts for businesses with a continuous reduction of the corporation tax rate from 56 percent in 1990 to 15 percent now.
The exemption of effortless income from dividends to interest earnings from the progressive income tax and investments to a uniform 25 percent for millionaires and billionaires is only mentioned at the margin like reinstatement of the property tax.
Tax revenues would be 50 billion Euros higher without these tax gifts. Our constitutionally established social state would be financed if you count the amount of the annual tax evasions – carefully estimated by the finance ministry – of 50 billion and the 90 billion annually through tax havens and tax avoidance through loopholes in the tax laws that were in no way intended for tax evasion. Only think of a genuine and just family policy with for example an education substance, the under-financing of local communities, and the renovation of our often degenerate infrastructure, the many degenerate schools and universities and respect of human dignity for the disadvantaged, weak or failed in our society. All this could be financed without problem in a largely public-interest oriented way… The excessive taxation on small family enterprises compared to conglomerates could then be easily and immediately brought in order.
Incidentally, I describe taxes as what they are – public interest fees! Regarding the middle class, it is only a hollow phrase when the majority of decision-makers of the established parties of every color stylize themselves as preservers and supporters of the middle class. The concrete political decisions of the last decades served almost exclusively the interests of corporations and nearly always to the disadvantage of the middle class. Is that a promotion of the middle class when the Amazon Corporation pays a tax rate of only 3 percent on 2 billion in profits and every middle class person pays the full tax rate? There are similarly disastrous numbers for the Ikea, Starbucks, Google and other world corporations.
The majority of deciders in the established parties claiming to support rural agriculture are just as deceptive. Ladies and gentlemen, look at the decisions of the governments in the last 20 years. Agricultural factories and industrial agriculture profited above all. More and more family enterprises had to close. I know there are wonderful members and (political) representatives in the established parties who do their utmost for a radical turning away from the neoliberal ideology and for rural agriculture. I am very thankful for these persons. One can only be amazed that they have not given up.
But we will steer directly to a plutocratic state form, a rule of the few, if the policy of corporate promotion is continued unrestrained by the majority of deciders!
The attack on democracy borne by all citizens has its most explosive example in the secret negotiations by our representatives in the Bundestag and the European Parliament on a free trade agreement between the US and the EU, the so-called TTIP agreement. Thanks be to God, there are other courageous persons in politics and journalism who public the secret plans of the TTIP for us alongside Edward Snowden who opened our eyes to the secret service monitoring of all citizens. An excellent article on this theme was published on 2/27/14 in the weekly “Die Zeit.”
The so-called harmonization of rules for social standards of employees, protection of the atmosphere and environmental- and food laws on the lowest level of the participating countries is a goal. Chlorinated chicken and genetically engineered food are striking examples. Hopefully the expectations of neoliberals will not be fulfilled that the people and the present can be nailed down to this “secondary war theater.”
The greatest danger is the intentional emptying of basic democratic rights and independent justice. As a perversion of ownership law, an arbitration court is planned filled with lawyers but without independent judges. Non-public negotiations are earmarked. The arbitration court clause actually grants corporations a special right to sue against the EU or the US when corporations are convinced that their profits will be cut through social, ecological or consumer protection regulations. Thus when the Bundestag passes a more rigorous consumer protection law and a firm can sell less, then Germany must replace this corporation’s missed profit with tax funds according to an “arbitration court judgment.” Our democratic freedom of decision would be at an end!
With this arbitration-court procedure, law is then decided “in the name of money” as a high point of neoliberalism and no longer “in the name of the people.” That was also the subtitle of the article in “Zeit.”
I hope very much that the elected politicians will prevent this attack on democracy and the independent judicial authority. It would be a catastrophe if our German people’s representatives make possible what was rejected by the large majority of the people, like the TTIP agreement through abstention in approving genetically-engineered plants, for example genetic rice.
4. Consider the statement: “Performance must be rewarding.” More correctly, the demand according to the principle “performance must be rewarding” is one of the greatest brainwashing campaigns of neoliberal ideology. Does anyone really believe – outside the beneficiaries – that bonuses in the millions for top managers have anything to do with personal performance?
No, ladies and gentlemen, bonuses are nothing but seductions to the dance around the golden calf, seductions to self-deception, that one pretends the customer’s interest is paramount… A considerable portion of egoism slumbers in nearly every one of us.
The idea of bonus payments was actually the most brilliant idea of the rich and powerful in their model of the neoliberal economic ideology.
When operators and senior consultants receive bonuses on the basis of the number of surgical operations and transplants, this system can be called “deadly” in the truest sense of the word as Pope Francis did. I call this a gravely sick system and an insult to all religious doctrines or ethical-philosophical teachings as for example Immanuel Kant.
The competition philosophy anchored in the EU treaties led to a 43 percent increase in infant mortality in Greece since the beginning of the world financial crisis that Europeans renamed the Euro crisis because the pregnant could not afford any screening tests any more, one is overcome with anger! [Spiegel online from2/22/14 and Internet blog “Nachdenkseiten” 2/24/14]
Here are my suggested solutions since I do not only want to criticize:
1. No bonuses for top management and executive personnel.
2. Legal commitment of minimum wages that make possible a participation in society in the sense of the German Basic Law.
US President Roosevelt who successfully overcame the great economic crisis in the 1930s declared: “Businesses whose existence depends on paying their workers less than a living wage should not have a right to carry on their businesses in this country any more!”
3. Unconditional adoption of eco-social aspects, sustainability and economic ethics in the university curriculum – in the course of studies of economics.
4. Personal obligation of managers and all executive personnel to be engaged for questions of the total economy and society. “Expert-idiocy” should be resisted along with the “seductive splendor of ignorance” of a detached class.
5. Return to the macro-economic Golden Rule: “All wages in all branches should grow with the average productivity of the total economy plus the target inflation-rate of the central bank.” We have not paid attention to this Golden Rule in Germany in the last 10 years.
6. Expand the reporting- and publication duties for businesses (including subsidiary companies) with more than 500 co-workers…
If we could implement these proposals which could certainly be expanded, the continuing redistribution from the bottom to the top would be stopped. We could then introduce a correction of the distribution injustice through democratically agreed concepts because the present situation has already become intolerable.
That only 737 firms dominate 80 percent and the 147 largest dominate 40 percent of the world market cannot be good in the long run.
As a result, less than 1 percent of the 43,000 worldwide transnational businesses have control over the markets. What does that have to do with democracy and fair competition? [Study of the ETH Zurich –Arno Gruen: “Dem Leben entfremdet,” p.136]
It is sheer madness that 85 persons have as much wealth as the poorer half of the world, 3.6 billion persons! [Oxfam study in The Huffington Post, 2/27/14]
In conclusion, let me recall more statements by Pope Francis to which I agree wholeheartedly:
- “We have created new idols”
- “A new invisible and sometimes virtual tyranny arises that forces its laws and rules one-sidedly and mercilessly.”
- “In this system that tends to suck up everything to increase advantages, everything weak is defenseless over against the interests of the idolized market that become the absolute rule.”
- “This economy kills.”
Pope Francis certainly meant the existing and dominant neoliberal economic ideology, not the market economy generally.
I think every person with a conscience oriented in religion or ethics and morality cannot accept any longer the model “casino capitalism and profit maximization” any longer.
If we do not want to lead our society to the abyss, we must do everything to turn to an eco-social market economy oriented in the public interest.
A truly fair competition and above all cooperation to the advantage of society are obviously part of an eco-social market economy. We must overcome the graceless and ultimately foolish competition at any price. People became the crown of creation because unlike other creatures they cooperated from the start!
Use all your possibilities for this old new way. Perhaps this is stimulation for you, ladies and gentlemen:
The neoliberal economic ideology must be overcome (Pope Francis: “This economy kills”).
Here is my last word. Every society in history has recognized the glorification of “false gods” as the wrong way and overcome this idolatry. I believe that even amid the wrong track of neoliberal economic and social ideology.
Lend a hand – our wonderfully beautiful Planet Earth deserves our struggle!
Thanks for your attention. Inspiration and everything good for you in this fasting period!