Peter Söderbaum has exposed a range of interactions between economy and democracy with good reason: there is an inflation of authoritarian opinions, which do not hide any more that they reject both the concept and the practice of democracy as „one of neoliberal fantasies“. This view is among many authors mediated by Jodi Dean in her book Democracy and other Neoliberal Fantasies. There are multiple reasons to criticize what is going on in the frames of public democratic institutions: fundamental imperatives of democracy are increasingly just empty words, power is more and more concetrated in fewer hands.
The disappointment related to this process is wide spread, but not theoretically acceptable. And has to be explained and rejected also through the analysis of what is going on in the world economy under the name of neoliberal privatisation of commons and deregulation of economical and social institutions. The global financial and economic crisis is turning into the crisis of the very notion of democracy and of welfare state.
The phenomena of societies without a middle class and with a concentration of wealth in few families and poverty in the majority of people, being pacified by a brutal military regime, is becoming generally spread around the globe, only the pacification became more sofisticated and complex, relying on media, political class (parties) alienation and main stream academic industrial complex. The few states (of ‘the axis of evil’) that officially and radically oppose this globalisation, practice the most radical forms of eradication of political and social transparency, a wide spread nepotism, and can not represent a globally acceptable and viable alternative.
Peter Söderbaum exposed the main points of importance of the economical science in this relationship: it should move from its self understanding as value-neutral (like mathematics or physics) to „an analysis that respects fundamental imperatives of democracy“, e.g. pluralism and transparency, not only within its methodology and among its actors, but also in regard to the global society, including the future generations. This opens a debate about paradigm in economics, as he emphasizes, a debate that also opens the status of multiple well established terms and notions, which had got status of the untouchables.
This notions are „external costs“, a shifting first from Economic Man to Political Economic Person and then to Economic or Social Groups, the shifting from „the market that will arrange everything“ to the examination of multiple functions of the monopolies which distort the functioning of the free market and turn it into the frame of institutionalised privileges and discriminations. From economic model of ‘the free market’ as a supposition, where all actors (Economic Man) have equal starting positions we have to move to the analysis of the factual starting positions of actors that have privileged starting positions due to their monopolies while being treated more favourably by the legislators as others, like banks and the financial sector in the actual world financial crisis, or being better treated by the justice or the authorities, or having easier access to the raw materials, production means and detailed markets as their competition or having special state support through direct financing of their research and development of new products: the fact is that the real free market exists just on the margins of the global markets, in the niches that were left out by the international companies as not being attractive enough by their profitability. The factual status of the free markets is not of interest for the economical science which is operating mostly only with selfproduced theoretical ‘models’ and ‘principles’ and leaving by side the reality not corresponding to their principles as only disappearing disturbances without having enough significance to be detected. While the development is of the opposite nature, the free markets become more and more limited and a kind of exception in the global economy, but still being exposed as the overarching model and principle of the main stream economical science.
Though there are some important differences between the neoclassical economists, still respecting certain external paradigmatic goal as limits like semi-full employment, and are scandalized by the extent of rates of unemployment already dominant, or by the extent of pollution through the dominant influence of the economy on envirenment, or by the instability of the whole economy provoked by the uncontrolled derived new financial products, not being well understood even by their own inventors or by the extent of profits in situations where even bigger bank turn to acting as they were hedgefonds.
The abolishment of the Glass-Steagall-Act under Bill Clinton marked a drastical step forward to deregulation in the field of banking regulations and cancelled the difference between the bussiness and investment banking, having for consequence the substantial reduction of control over the banking system and the resulting concentration of banking in just the few banks like Citigroup and the Bank of America grew up and a lot of smaller banks and broker firms disappeared. These huge banks had to be rescued by the state as they broke and their dominance reminded untouched even through their collapse during the financial crises, a fact, that can not be pretended for the rest of the economy or the global society.
Peter Söderbaum’s questions ‘how the sustainable development is to understand’ and ‘how different ways of strenghtening democracy should be discussed’ are interrelated. We can not come to an answer to one of them without searching after the answers for the other one as well. Both are not possible without a transparency within the global society and without a tranparency of the relationship of the global society to the globe.
References:
Jodi Dean, 2009, Democracy and Other Neolibral Fantasies, Duke University Press.
Leo Šešerko, 2007, L’Environment dans l’analyse de l’économie politique de Marx
d’aujourd’hui, Congrès international Marx IV, section écologie, Paris-Sorbonne et Nanterre, 3/6 octobre.
Kean Birch & Vlad Mykhnenko (ed.), 2010, The Rise and the Fall of Neoliberalism,
Zed Books Ltd, London.
Stuart Sim, 2010, The End of Modernity, What the Financial and Environmental Crisis is Really Telling Us, Edinburgh University Press.