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The Free Market Ends in Robbery: Professor Rademacher

"The free market ends in robbery." Professor Rademacher urges an alternative to "naive market fundamentalism". Seek and you will find. "Rhine capitalism and the social market economy could be models of a global, eco-social market economy.."

Professor Radermacher on Globalization

[This article originally published in: NGZ Online, April 30, 2004 is translated from the German on the World Wide Web,  http://wwwngz-online.de/ngz/news/lokal.wirtschaft/2004-0429/treff.html.]

Globalization will end in chaos without a fundamental chance of course. Professor Franz Josef Radermacher, director of the research institute for applied knowledge (FAW) in Ulm spoke with Neusser Wirtschaftstress Klartext.]

In the conference room of the Euromoda with representatives of the economy and management, Radermacher put an end to the "fairytale" of the free market as the best mechanism for prosperity and freedom in the world. "Competition is blind and is nothing but an optimization process", the professor said.

In a world of globalization, the framing conditions are decisive - for protection of the environment, social balance and protection of cultures. "The free market ends in robbery." Radermacher urges an alternative to "na´ve market fundamentalism".

Seek and you will find. "Rhine capitalism and the social market economy could be models of a global, eco-social market economy. Information- and communication technologies combined with modern transportation annul the separating function of state borders.

Complex profit-oriented processes are organized around the globe. Industrial nations like Germany can feel the consequences. Radermacher made this clear in an example. In the past a high quality German car could only be manufactured with the social standard possible in Germany.

Today production can be differentiated. High-grade parts can be produced in Vietnam at low wages. As a result, the consumer in Germany rejoices about reasonable prices for high-quality products while at the same time his or her job could be lost. No controlling authority exists. A world democracy or world parliament does not exist and cannot be expected in the foreseeable future.

Only the World Trade Organization (WTO) and the International Monetary Fund (IMF) have "harsh" sanction mechanisms with penalty fees or credits. Institutions occupied with social questions or environment protection are corrected. "The free trade logic is enforced to their detriment."

International policy is marked by the highest ethical goals while its practice is nothing but the plundering of the poor by the rich states. "This condition will make everyone poor in the long run. A globalized economic system that cuts off the poor behind guarded borders while showing the wealth of neighbors on television practices terror."

"The challenge facing the world is the challenge of overcoming poverty", Radermacher says and urges a global Marshall Plan comparable to the rebuilding of Germany and Europe after the Second World War. "However this can only happen with the readiness of the rich for co-financing in creating generally accepted standards."

The best example, according to the professor from Ulm, is the European Union. There the rich countries push the development of the poorer by financially supporting the development of the EU standard from the economy to the social. For Germany and Europe, Radermacher recommends a "double strategy" since a redirection in the globalization process cannot be accomplished overnight.

Adjusting to current world market pressure, "when others plunder, we must plunder" - and simultaneously advancing political institutions for a better world order could bring a change. "Sometimes one must do what is wrong to achieve something better", the professor said and recalled a successful example - from his perspective - the NATO Double Resolution of the 1980s.

At that time NATO responded to the nuclear rearmament of the Warsaw pact by announcing two new missiles would be stationed in the West for every additional missile in the East.

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