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Globalization: Schroder and Altvater

Gerhard Schroder, chancellor of Germany, and Elmar Altvater, professor of political economy at the Free University of Berlin discussed the phenomenon of globalization. This article is translated from the German on the WWW.
Globalization: Schroder and Altvater

[Gerhard Schroder's address at the 5th international economic meeting of the SPD (Socialist party of Germany), September 4, 2001 is interesting even if it isn't a high-soaring analytical flight. On the same day, an article of the Berlin professor of economics Elmar Altvater (author of "Limits of Globalization" with B. Mahnkopf) appeared in the Franfurt Rundschau that was almost an answer to the chancellor. Altvater's article was written before the chancellor's address and offers a critical refutation of the government's attempts at coddling its critics. Both are translated from the German on the World Wide Web, www.uni-kassel.de/fb10/frieden/themen/Globalisierung/shroeder.html.]

Gerhard Schroder: An Americanization of Society Alarms Me

(... ) For some time we have noticed an unrest and concern among many people. This restlessness arises with the phenomenon of "globalization".

As it was and would be foolish to dismiss this phenomenon as a "trendy phenomenon" resisted by stubborn persons who refuse the challenge of an interwoven international economy, it would be short-sighted not to consider the questions raised by many people today. A gigantic wheel hisses through our life with great velocity. We don't know who turns it. This is the perception of many people. They want to know: Do those involved in this rapidly accelerated process of progress whether politicians, economic managers or scientists still influence its development?

Or is globalization a kind of force of nature that sweeps over us? Goteborg, Seattle and Genoa have become synonyms for the protests of young persons. These engaged youths do not fail to warn us that economic development on a large scale must have a social meaning. They criticize the alleged effects of globalization on individual persons, cooperative social life, the development of individual countries and whole continents, global ecological balance and the quality of democracy.

Politics seems well advised to take this protest seriously even if it often seems without a precise political direction. I don't speak of the violent criminals who only use these summit meetings as occasions for hooligans or rioters blind with rage. The many active persons from church groups or Third World initiatives who fear an uncontrolled domination of international financial markets and mammoth corporations and champion global justice and solidarity are not crackpots. They deplore what the author Peter Schneider once called the "outer space coldness of globalization".

These young persons should not be thrown lump-sum into a category of "globalization opponents" or "globalization enemies" irrespective whether their protest is motivated morally, religiously, ecologically or economically. As a rule, they know that globalization cannot be cancelled. However they are in good company with their criticism of unequal trade relations or financial speculations which bring whole economies to the edge of ruin.

Michael Moore, the general director of the WTO, recently said very openly that he shares 80% of the arguments of critics. He knows that we are not spectators of globalization but must steer this development of worldwide market relations in the WTO and elsewhere. We don't put in question the worldwide economic division of labor or firm mergers overarching countries. We know that international cooperation creates many jobs among us in Germany and Europe and offers new chances and great advantages for the poor and poorest countries.

So-called developing countries should not be abandoned to the free play of market forces. We support the creation of globalization processes through politics for the enforcement of political-ethical principles in the world economy, a framework for international financial markets that promotes development. What is central in a word is a return of politics, a political, democratic control of globalization.

When young persons do their utmost for the observance of human rights, development and prosperity in all regions of this one world, that is an expression of a living democratic culture and of the vitality of our political values. The right to participate in public affairs, sympathy in the fate of others and readiness for worldwide solidarity are articulated here.

National governments with their possible actions thrust on limits in an integrated worldwide production with "global players" seeking the most advantageous worldwide location for their activities and with transnational corporate networks. Still politics decides and acts and isn't powerless.

The German government supports introduction of international environmental- and social standards. We seek an improved international financial architecture and clear rules in the battle against economic and currency crises. With many others, we work to combat money-laundering and effective restrictions on so-called "tax havens".

At the world economic summit in Koln, we passed a debt cancellation initiative for the poorest countries. More than 100 billion marks have already been waived to these poorest countries. This gives them new possibilities for a peaceful and prosperous development.

Despite considerable resistance, we set the conversion of the Kyoto protocol back on the straight and narrow at the climate conference in Bonn. We Germans accept responsibility in leading the way in improving energy efficiency and reducing greenhouse gases to encourage others. Without our engagement, the Kyoto protocol would have long been dead and buried.

Finally we accept the plea of the general secretary of the United Nations, Kofi Annan, to enact an international program to combat Aids.

I regard it a great achievement that European societies have not resigned to the glaring income disparities and social exclusion. We have clear ideas about sympathy and human dignity. This is what I meant when I said in another context that an Americanization of German society alarms me.

Elmar Altvater: Globalization is not a natural event

The German Bundestag appointed an Enquete commission that focused on "Globalization of the World Economy". After one-and-a-half years of work, an interim report was passed and submitted to the parliament. Whoever expected an answer to the many questions under discussion will be disappointed. Academics argue about globalization like politicians. For the liberals among them, globalization is synonymous with more freedom and prosperity. From that assumption, they derive continuing as in the past. The last globalization secrets must now be dismantled and governments obliged to adjust to the iron laws of the world market. This chance shouldn't be missed at the start of the 21st century.

This position is attractive since it leaves responsibility to individuals for their fate on the global markets. However it is dangerous like sweet poison. The democratic self-determination of a people is neutralized with the recognition of global practical necessities. The crises of globalization with their disastrous consequences for people in southeast Asia, Latin America, Russia and Turkey are explained away.

However the beautiful liberal picture of globalization is no longer accepted. The protests of Seattle, Prague, Goteborg and Genoa made this clear. Even the liberal advocates can see the error in their models and are smitten with remorse when they are sensitive.

As a rule, the answer to this rhetorical question is that globalization must be accepted and simultaneously structured. The canon extends from improved transparency on financial markets, stabilization of exchange rates to a democratization of international financial institutions and a debt cancellation of heavily indebted developing countries. These are reasonable measures. Nevertheless winning majorities for them is difficult. Models of a totally liberalized world economy and the freedom of businesses without obstructive regulation up to the crash are too attractive. If these threaten, the IMF jumps out of the way. Debtors are supplied with funds so they can use the credits of the creditors and not drag them into bankruptcy. That debtors after such rescuing actions are more heavily indebted than before is a blemish but seldom provokes reflection on the principles of global financial markets.

Contrary to the liberal deregulation rhetoric, a political safety net is indispensable for the financial jugglers on the tightrope of their risky-speculative businesses. The consequences for others from their fall, for the state budget, employment and the income of the masses should be stressed, not only the jugglers' security.

However is the defensive safety net enough? Freedom from crisis of a capitalist world economy cannot be expected either from the soft measures for more transparency and commitment to cooperation or from a Tobin tax or target zones for exchange rates. This has never happened and cannot happen.

Measures can be judged on the global plane as to whether they promote or dampen crisis tendencies or whether they can be applied as "antidotes" with the outbreak of crisis. These reflections end up as rules of a "formation of globalization" as though globalization were an unalterable natural event that could be made humanly just by tending the garden. What are crucial are interventions in economic events in accordance with political goals like income- and employment security or distributive justice, not only reactive policies allowing all freedoms to the actors of globalization.

Should these goals of globalization be sacrificed? Not only structuring globalization is central but setting limits to the actors of globalization. Short-term speculative profits plunging whole economies into crisis must be prevented. The most recent example is Argentina. In the last ten years, 20 percent of the gross national product of this country was destroyed through the financial crises. This price is too high. The talk of a "fair balancing of interests" between North and South, above and below, is sympathetic, trivializing or paradoxical like the Sponti-imperative: "You don't have a chance; seize it!"

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