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NKarin PriesterA Schoolgirl’s Report:The feminine face of JihadThomas MeyerHow to Defeat Fear-Mongering:Take Fears SeriouslyJürgen KockaPiketty on InequalityA Conversation with Wolfgang Merkel»Democracy’s Problem is not the Crisisbut the Triumph of Capitalism«

3 2015Journal of Social Democracy€ 3,80

1 Editorial

2 Tom SchimmeckIs the Dream Over? The United States – a case of narrativeoverreach

7 Karin PriesterA Schoolgirl’s Report:The feminine face of Jihad

11 Gernot ErlerLast Exit Minsk

14 Thomas MeyerHow to Defeat Fear-Mongering:Take Fears Seriously

17 Marc SaxerShaping the Next Great Transformation

20 Elmar AltvaterThe »Crass Utopia« of Free Trade and itsAlternative: Solar power plus solidarity

23 Jürgen KockaPiketty on Inequality

27 A Conversation with Wolfgang Merkel»Democracy’s Problem is not the Crisisbut the Triumph of Capitalism«N

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In the essays submitted for this issue, our dis-tinguished authors all devote considerable atten-tion to the major crises of our time.Among theirthemes are the increasing dominance of marketsand great wealth over the democratic order inour societies and globally rampant inequality ofwealth and income, which the French economistThomas Piketty has recently put back into the cen-ter of public debates. By assembling reams of evi-dence on the structure and history of inequality,he has shed new light on this scandalous phe-nomenon.And over the past few years his researchhas begun to attract attention all over the world.Other crises featured in these pages include the nearly complete digitalizationof the economy, often referred to as »the second industrial revolution,« and thedisruption of the European peace system by Russia’s Ukraine policy. There arenumerous reciprocal relationships and murky connections among these majorcrises. The one thing they all have in common is that they harbor the potential tochange fundamentally the world as a whole, the European order, and almostevery society. Furthermore, they all raise new questions for which sound answershave yet to be found. Not only do our authors seek to clarify the nature andcauses of these changes; they are also interested in helping us find answers thatmight offer direction and guidance as we devise responses to those wrenchingtransformations. Obviously, the future that libertarian-leaning utopians in SiliconValley have dreamed up cries out for alternative approaches. In the best case, thenew possibilities inherent in advanced technologies would be made compatiblewith traditional political ideals such as an autonomous life, good work, checkson government action, and a democratic society. Time is of the essence.As capi-talism gradually throws off the restraints placed on it and increasingly becomesan independent hyper-power, there is a danger that democratic polities willdegenerate into market-states, mere service-providers for the interests of highfinance. If that happens, democracy will slowly lose its credibility and that willenable both left- and right-wing populism to flourish. Moreover, advancing in-equality undermines democratic legitimation, while rendering the new finan-cial-market-driven form of capitalism more susceptible to recessions.

All of these trends warrant urgent political debate at the transnational level,since their causes have long since transcended national boundaries. Demo-cratic solutions, therefore, will succeed and have the desired effects only if theytake a transnational approach. Such solutions, in general terms, would includethe political and social imbedding of markets, agreement on new tax policiesto reverse global inequality, and efforts by society to shape and control the digi-talization of work, life, and communication. The current issue should be read asa contribution to that debate.

Thomas MeyerEditor-in-Chief and Co-Publisher

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First it was a misunderstanding, and thena joke. My credit card had failed to work atcash register three of the El Camino RealSafeway, the main drag of Silicon Valley.When the transaction finally went through,I asked the cashier whether »you have yourmoney now.« For that remark I was re-warded with a broad, malicious grin. »Mymoney?« said the young man, knitting hisbrow. »I think the one percent have alreadytaken care of that.«

The one percent. In the fall of 2011 the»Occupy Wall Street« movement took tothe streets against the growing concen-tration of wealth in the hands of the upperechelons of American society. The outcrydied away with amazing rapidity. Yet therecognition that there is a tiny, extremelywealthy and influential stratum some-where up at the top has persisted, alteringboth our vocabulary and our conscious-ness. Today in the USA you can hear bittercomments about social disparities on anystreet corner.

Up until the crash of 2008 most Ame-ricans did not care to know exactly howthings stood with the distribution of wealthin their country.Talk about equality alwaysled straightaway to the suspicion that thespeaker was a socialist, a killjoy who want-ed to undermine the Americans’ naturallyoptimistic, »can do« spirit and their ambi-tion to strike it rich. Such talk was con-trary to the American Dream, the rags-to-riches narrative that had fed the hungerfor advancement. It was believed that any-one, even a humble dishwasher, could makeit if s/he really wanted to. People just need-ed to hang in there and give it their all.This

is the prospect that has led America’s lowerclasses to put their noses to the grindstoneand that continues to attract millions ofimmigrants to the »new world«: the prom-ise of a life of freedom and abundance, ofhappiness that is entirely individual. Thentoo there is always gold fever – the chancethat one might get rich, make the big score,hit the jackpot.

There is no story more exalted andvariegated than this American one. Thenarrative of the American dream may pos-sibly be the most popular global promiseof the modern age; certainly it has beenpresented thousands of times in film andsong. It was already implicit in the De-claration of Independence of 1776, whichpostulated that all men were »createdequal« and that every person had the rightto life, liberty, and the »pursuit of happi-ness.« This formula, poetic and grand-iloquent at the same time, has exerted itsmagnetic attraction all over the world.

For quite some time it seemed as thoughthe nation’s self-confidence, its convictionthat it was a »gift to mankind« and offeredthe best possible life, wasunassailable. True enough,the number of people whostill believe in the Ame-rican dream remains high. Nevertheless, ifone takes into account that we are talkingabout a quasi-religious doctrine, a magicformula central to the country’s identity,the number of true believers is undergoingan ominous decline. In 2009, when theeconomic crisis was at its worst, 72 % ofrespondents still professed belief in thismost fundamental of American tenets. By

Tom Schimmeck

Is the Dream Over?The United States – a case of narrative overreach

»That dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement...«

(James Truslow Adams, 1932)

Doubts arerampant

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now that number has fallen to just 64 %.Doubts are rampant. In opinion surveystwo-thirds of Americans express their con-viction that this America no longer offerseveryone the same opportunities and thatthey no longer agree with the current dis-tribution of wealth. By now only a minoritystill thinks that the next generation will bebetter off than this one. The issue of in-equality is being talked about everywhere,even at Harvard and in economics jour-nals, where a scholar such as Thomas Pi-ketty is still regarded as a left-wing outsider.

Despite this shift, the majority of thecitizenry still has no idea of how wide thegap has become between the wealthy andeveryone else.When asked to choose fromamong various models of wealth distribu-tion the one that most accurately reflectsthe status quo, Americans tend to opt formodels that present a far less drastic pictureof economic inequality than is actuallywarranted. In fact, statistics reveal that in-equality has reached a level not seen since1929, the era just before the Great De-pression. It has been increasing steadily formore than three decades. This is due aboveall to the boom in the top one-tenth of onepercent of U.S. society, which has morethan tripled its share of the national wealthsince 1979, from 7 % to 22 %. In this way, allof the efforts to redistribute wealth under-taken since 1929 have been rendered nulland void.

Although Americans have increasedtheir productivity by 80 % since 1979, thegreat majority have seen virtually no bene-fit from these gains. Today, the bonusespaid out to managers alone are on average62 times higher than the salary earned bya typical American worker. The averageemployee has to slave away for more thana month to »earn« what his or her CEOmakes in a single hour.

By now the »Great Recession« seemsto be over, at least for the time being. Un-employment continues to decline. In justsix years the Obama Administration has

managed to reignite a boom, accompaniedby impressive growth rates and all-timehighs on the stock markets. Still, thereis enormous disappointment, because themajority is losing out, while the newlycreated jobs are often low-paying. Thisphase of the economic recovery has notbeen felt by most people.

The spread between the rich and every-one else has widened during the Obamaera. In the first two years of the recoverythe wealth of the top 7 % of U.S. societygrew by another 28 %; meanwhile, theremaining 93 % actually lost 4 % of theirwealth. According to estimates by criticaleconomists, 95 % of all the income gainssince 2009 were racked up by the top onepercent of income earners, already ob-scenely rich, while median household in-come fell by more than a third. The criticscalculate that the middle class is poorertoday than it was back in 1989, when Ro-nald Reagan left the White House. Obamahimself has conceded that »almost all thebenefits of the upturn have gone to the topone percent.«

There was a time when the Americanpublic scarcely would have noticed factslike these. A solid citizen of the UnitedStates would have shrugged his shouldersand said: »if I just workhard enough, maybe to-morrow I will be amongthe lucky few.And if I don’tmake it, maybe my kids will.« Today thingsare quite different. To begin with, manyAmericans have been witnesses of theirown social descent and realize that themiddle class is shrinking perceptibly. Fur-thermore, millions of college graduatesare beginning their careers deeply in debt(the total amount of unpaid student loanshas climbed to 1.2 trillion dollars). Finally,everyone can see that the American infra-structure is falling apart. The Americanengineering society ASCE has given it agrade of D+, which means: »bad, with ahigh risk of collapses.« By 2020 an invest-

The tatteredsocial contract

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ment of 3.6 trillion dollars will be neededto fix it.

Moreover, the public is finally be-coming aware of the affiliation betweenwealth and power, and the enormous in-fluence of big money on politics. The post-democratic orchestration of moods andopinions has become a major, noisy, luc-rative business. The presidential electioncampaign of 2012 burned through the re-cord sum of 6.3 billion dollars. The mid-term elections last year cost around fourbillion. Today, even contests for insignifi-cant posts in local government can requirelavish material resources. And the SupremeCourt, of all institutions, removed the lastremaining limits on the rampant spendingbinges.

George Packer, a staff writer for theNew Yorker, has provided a minute descrip-tion of this multi-faceted decline in hisrightly-praised book, The Unwinding. Theauthor has surveyed both prospering anddecaying landscapes across the UnitedStates and analyzed the biographies of quitea few average blue-collar types, small busi-nessmen, mothers, preachers, addicts, andeven a few so-called celebrities. Packer usesthese varying portraits to throw the declineof the American dream into sharp relief,sometimes from close up, sometimes froma distance, often in a downright sensualstyle. In his own words, Packer wanted toreveal »the nervous system of the lastgeneration of Americans.«

And he does exactly that. Those nervesare on edge. In an interview for the publicbroadcasting network PBS – itself per-petually under siege – Packer summarizedthe findings of his journalistic tour de force.Not only did he take note of collapsinginstitutions and infrastructure; he alsoidentified a gradually widening fissure inthe social fabric. In his view it involves aviolation of the unwritten social contract,which holds that, »if you work hard andare basically a good citizen, you will have aplace.« The recognition that people used

to be granted as members of the socialfabric, the prospect of an economically se-cure existence, plus the chance that one’schildren would have an even better life –these were the foundations of the Americandream. However, according to Packer thisstructure has fallen apart since the end ofthe Seventies: »Basically, the contract hasbeen torn to pieces.« And he surveys the arcfrom 1978 to 2012, from Carter to Obama.It is a time span of barely thirty years with-out a world war and without the trauma ofVietnam. Yet it has been an era of harshswings of the pendulum, a sinuous journeyfull of promises and reverses, one with un-anticipated catastrophes and new wars, inwhich the one constant has been the steady,relentless growth of social inequality.

There is no reason for anyone to visitAmerica’s old mining areas or its »rust belt«of de-industrializing cities from Chicagoto the East Coast, in order to experiencethe crisis besetting theAmerican dream. Evenon the idyllic beaches ofAmerican hopes one always can find theirdark underbelly.Anyone who cares to lookmore closely will see day laborers standingon the streets even of myth-enshroudedSilicon Valley. Right next to chic, prosper-ous Palo Alto, the home of Hewlett Packardand Stanford University, lies the commu-nity of East Palo Alto, a violence-plaguedgangland whose residents are mainly blackand Hispanic. There, it is not unusual forpeople to be found lying dead in the streets– just like that.

It is in Silicon Valley, a place that sym-bolizes genius and entrepreneurialism,where inventors can become millionairesovernight, that a closer look reveals thescratches and dents on the American bodypolitic. One encounters priests who de-nounce greed and derelicts who have fallenfar and fast – or never were high fliersin the first place. No doubt about it: Thebooming region between San Franciscoand San Jose is wealthy. The high tech elite,

Suburban poverty

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pampered by high salaries and stock op-tions, can afford to live the good life. Butfor average earners like teachers, bus driv-ers, waiters, and salespeople, bakers, con-struction workers, and people in other»normal« jobs, it is an increasing challengeto make ends meet here, or even in rea-sonable proximity to Silicon Valley.

For them the dream of owning theirown home is out of reach, since even themost ramshackle dump will cost a milliondollars. Even rents, groceries, education,and transportation are barely affordableanymore. Everywhere, you run into peoplewho put up with very long commutes forpoorly paid jobs. Homelessness is rampant.Many people live in their cars. At fooddistribution centers, soup kitchens, andshelters you meet people whose lives havebeen totally disrupted. The material basisof their lives has been destroyed by an ill-ness, a layoff, a workplace accident, a sep-aration, drugs, or just a minor misfortune.It doesn’t take long. As the director of ahomeless shelter behind San Francisco Air-port put it, »We are all just one paycheckaway from ending up here ourselves.«

In the back room of a pizzeria on ElCamino Real, I ran into a group of busdrivers who work for Facebook: blacks,whites,Latinos,men and women from Asia,Latin America, and Europe. At some pointthey, their parents, or their grandparentswere lured here by the siren song of theAmerican dream. Now they have long com-mutes to work, then very long shifts on thebuses in which top earners from San Fran-cisco ride. They are away from home forfourteen hours a day and are getting no-where. These drivers do not live in fear orterror, nor do they appear absolutely des-perate.Still, they see their share of the greatprosperity all around them shrinking, theirliving conditions ever more straitened,andtheir opportunities pretty meager indeed.Their children’s chances of attending auniversity like Stanford are growing evermore remote.

Scholars talk of »modern poverty« andthe working poor. But the latter are nolonger to be found – at least not only – inremote rural areas and the famous or in-famous inner-city slums. Poverty has takenup residence in America’s suburbs, com-munities that have grown up since WW II,enjoyed hefty subsidies, and been knit to-gether by a network of freeways. For a longtime these suburbs were refuges of a tran-quil, stable, »better« life, accompanied bythe roar of lawn mowers and the spicy odorof the barbecue grill. They were the truehome of the American dream. Now, manyof them are showcases of suburban pover-ty. For three decades poverty has been in-creasing fastest in the suburbs. Today thereis more poverty in the suburbs than in theurban centers of the United States.

A survey of American history indicatesthat affluence has been highly concentratedfrom the very beginning. In port cities likeBoston or New York, the top one percentalready held 40-50 % of thewealth as early as the nine-teenth century. Furthermore,this wealth was always in thehands of white people, and it has remainedso. In 2010 the average white household inthe United States was almost twenty timeswealthier than the average black house-hold and more than seventy times richerthan the average Latino family. If we ex-clude home ownership from the calcula-tion, then the ratio is closer to 100:1.

Still, certain things have changed. Thelast crisis hit the less affluent dispropor-tionately hard. But more importantly, taxeslevied on great wealth have fallen tremen-dously since the presidency of Ronald Rea-gan (1981-1989). Moreover, opportunitiesfor capital flight and global »tax planning«by corporations and the super-rich havemultiplied marvelously. Before the Reaganera top income earners in the USA stillcontributed heavily to state revenues.

Perpetual campaigns for ever moreradical tax cuts and ever smaller govern-

The grapesof wrath

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ment have fostered an attitude, in conser-vative circles at least, of general hostility tothe structures and institutions of society.There is constant sniping at big govern-ment, the allegedly so profligate state, thefederal government, and the political estab-lishment in Washington. All this has hadfar-ranging consequences that pose a threatto democracy itself. The U.S. Congress,supposedly representing the citizens of theUnited States, now has disapproval ratingsof between 74 and 86 %. To some extent thishas had schizophrenic implications, sincenow some parts of Washington, believingthat they must deliver on their own rheto-ric,are fighting fiercely against themselves.

Republicans, libertarians, and the TeaParty have fed this diffuse anger. The latterhas been a paradoxical phenomenon. Onone hand, a defining feature of the Tea Partyto this day has been its anti-establishmentattitude. Yet it is sponsored mainly by bil-lionaires like the Koch brothers, who maybe betting that its celebrated hostility tooversight and control will lead to less regu-lation and environmental protection aswell as lower taxes. Both the Tea Party andits backers are climate change deniers.

Since the Clinton era (1993-2001)American politics has become markedlymore aggressive. Newt Gingrich, a Repub-lican who held the office of Speaker ofthe U.S. House of Representatives from1995 to 1999, followed Mao’s doctrine ofbloodless war by adopting an acrimonious,hysterical tone in his public utteranceswhich still dominates political debates.Today it is characteristic of the hyper-ventilating commentators on talk radioand on Rupert Murdoch’s Fox News Chan-nel. Emotions are the main thing here,especially when whipped up on command.Politics has become a religious war. De-bates resemble a Pavlovian lab experimentin which salivation is produced on cue. Inrecent years every new election campaignhas documented the dramatic decline ofdiscourse.

During George W. Bush’s terms in of-fice, the trend toward polarization and emo-tionalism in politics reached new heights,and not only because of the »permanentwar on terror.« The two political campscame to despise one another more andmore. Obama’s presidency has been affect-ed by these divisions from beginning toend. In fact, his opponents condemn himtoday as the final fruit of a Muslim-Sovietconspiracy against the USA. Even Obamalacked the power durably to influence thestyle and structure of his country.

As the Obama era approaches its end– a period infused with so much longingand promise – disillusionment and rancorare spreading. The foundation of values iseroding further, as the common groundonce shared by most Americans shrinks.Even the rules of the game often seem tohave lost all value. Republican fundamen-talism on several occasions has driven thestate to the brink of insolvency.

The rules of the game also are floutedwith ever greater frequency. This couldbe observed at the beginning of March,when Israel’s Premier, Benjamin Netan-yahu, facing the prospect of a close elect-ion, addressed Congress at the invitation ofRepublican House Speaker John Boehner– while ignoring the White House. Shortlythereafter, 47 Senators signed a letter tothe Iranian leadership written by freshmanSenator Tom Cotton. The message threat-ened that a Republican president in 2017could render any nuclear deal with Irannull and void »with the stroke of a pen.«The letter constituted an unprecedentedact of sabotage against the United Statesgovernment. While Boehner was presen-ting his guest Netanyahu with a bust ofChurchill, his fellow Republican, JohnMcCain,savaged the German foreign min-ister Frank-Walter Steinmeier, whom heaccused of belonging to the »diplomaticschool of Neville Chamberlain.«

Agreement about many of the foun-dational elements of American civilization

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is evaporating, and with it the resonance ofthe great story of the United States. It hadbeen said that the world’s last superpowerhas been suffering the consequences ofimperial overreach, but it looks as thoughthe USA is actually a victim of narrativeoverreach. It is losing its own story, be-cause that narrative no longer correspondsto actual practice; hence, it sinks to thelevel of kitsch.

Its expansive ego, as the home of at-tractive ideas and products, as the land of

liberty and opportunity, a country thatserves the cause of good everywhere in theworld (if need be by force of arms), has be-come fragile. Current discourses under-mine consensus and reveal a society in tat-ters, at odds with itself. The obviously in-creasing gap between the billionaires andthe have-nots is putting more pressure onAmericans’ self-image.As its shared mythosfalls apart, the nation’s morale erodes.

One person’s dream has long since be-come another person’s nightmare.

Tom Schimmeckis a freelance author living in Hamburg. His most recent book, published by Westend Press, is entitled: Ambesten nichts Neues: Medien, Macht und Meinungsmache.

tom@schimmeck.de

In the Year of Our Lord 1212 an event tookplace in the regions around Paris andCologne that has since become legendary:the Children’s Crusade. Several thousandyoung people headed south to join in acrusade against the infidels in the HolyLand. There is much debate about how farthey actually got and what happened tothem, but their spiritual zeal gripped evenyoung girls.

Today the Middle East is again exertinga magical pull on the young, includingyoung girls. As the British Guardian re-marked on September 29, 2014: »Hundredsof young woman and girls are leaving theirhomes in Western countries to join Islamicfighters in the Middle East, causing in-creasing concern among counter-terro-rism investigators.« Jihad tourism is takingthe place of Sixties-style revolutionarytourism, as holy war fills the void left be-

hind by revolution, which by now is in-voked only in the past tense.

Crusades are always a big adventurefor immature minds and attract idealists,romantics, seekers after meaning, and drop-outs. That happens even in the best fami-lies. As an eighteen-year-old high schoolstudent, Ernst Jünger ran away to join theFrench Foreign Legion, although his adven-ture only lasted six weeks. When she wasnineteen, the British noblewoman JessicaMitford eloped with her lover, a nephewof Winston Churchill, so they could fightin the Spanish Civil War. And during theSixties, the future writer Régis Debraywho attended elite schools and came froma well-off family, joined Che Guevara’sguerilla campaign.

Some 10 % of Jihadists from the Westare alleged to be young girls or women,mostly those with an »immigration back-

Karin Priester

A Schoolgirl’s ReportThe feminine face of Jihad

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ground« or from European-Muslim mixedmarriages. In France the proportion of wo-men in Jihadist ranks is even higher, ataround 20 %.At the end of 2014, Le Mondetallied 88 women, often from non-religiousmiddle class households, who had gone toSyria to join up with either IS or Al Nusra,the Syrian branch of Al Qaeda. Othersources estimate the number in France atbetween 100 and 150 women, includingsome with children. In Germany it is al-leged that there are about 100,as Der Spiegelreported, but the trend is upward. In pro-portion to its total population, little Bel-gium has the largest share of Jihadists, in-cluding around 20 young women.

Here are some examples: the sixteen-year-old twins Zahra and Salma Halanefrom Manchester, England, originally fromSomalia, sixteen-year-old Nora el-Bathyfrom Avignon, and a fifteen-year-old highschool student from Konstanz named Sa-rah O. Both of the latter have Algerianfathers. The twenty-year-old student AqsaMahmood of Pakistani descent, from Scot-land, sends tweets from Syria under thename Umm Layth (Mother of the Lion),claiming that she wishes to become a mar-tyr in the holy war. Three young Americangirls, aged 15, 16, and 17, of Somali andSudanese descent, were apprehended atthe Frankfurt Airport on the way to Syria.Sometimes entire families, including thosewith small children, move to the Syrianwar zone. And the wife of one of the Parisassassins of January, 2015, twenty-six-year-old Hayat Boumedienne, moved toSyria immediately after the attacks.

In the small French town of Auxerrethere is a group of over thirty women, allveiled in black, who belong to a pietistic-fundamentalist sect known as the Tablighi,which the German Constitutional Protec-tion Unit classifies as a conduit for Islamicterrorism. The group is led by a Moroccanwoman and a French convert. They pro-selytize among marginalized Muslim wom-en from sub-Saharan Africa and the North

African Maghreb, and oppose not only theWest but also the Islam of their parents’generation, which they deem too moderate.The Tablighi are said to be especially popu-lar among female converts. All this is hap-pening in a small town of only 43,000 in-habitants far out in the provinces of France,led by women who have issued a feministrebuff to their emancipation and integra-tion into French society. Feminism can alsobackfire.

Melanie Smith, a scholar at King’s Col-lege, London, has studied 200 Western wo-men who are now living in parts of Syriaoccupied by IS, mainly intheir bastion of Ar-Raqqa,including about 60 fromGreat Britain alone. By nowthose figures likely would be much higher.When it comes to preparing for, organi-zing, and to some extent also financingthe journey, one can hardly overestimatethe role played by the Internet and socialmedia. Twitter, Facebook, and Skype enableSyria-bound women to establish contactsand make concrete preparations for theirdeparture. Parents are totally flabbergastedwhen their daughters get in touch withthem from Syria. They say: our childrenare just too nice and hard-working to dosuch a thing. Nobody could have anti-cipated this, so they must have been brain-washed.

One prerequisite for their trip to Syriais a quick betrothal to an IS fighter, whichis usually set in motion via Skype evenbefore the journey begins. Many MuslimWesterners in IS-controlled territory don’tspeak Arabic or have any contact with localwomen, so they are willing to allow IS-sympathizing young women to travel tothe Middle East in search of their RobinHood or Prince Charming. Nor should weoverlook the sex appeal of these beardedyoung men posing atop tanks with flagsand Kalashnikovs, their chests swollenwith pride. The French »Center for thePrevention of Sectarianism Related to

A multiplicityof motives

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Islam« identifies five motives that may leada person to embrace Islamic fundamen-talist sects such as the Tablighi or Salafists:the image of the heroic knight, whichmainly appeals to young men; the wish torender humanitarian aid, which attractsyoung women, many of them still minors;the quest for a leader; inspiration providedby video war games such as Call of Duty;and finally the chance to act out fantasiesof omnipotence and feel as though alllimits and boundaries have been set asideby a religiously issued license to kill. Yetthose actually involved consistently referto other motives, including the quest forcommunity, belonging, and identity andthe desire to live according to their reli-gion among fellow-believers, without inter-ference. In the background one also findscrises of adolescence, difficult family cir-cumstances, a lack of perspective, socialmarginalization, and – among Muslimgirls – low self-esteem and the desire tostand up for themselves.

By no means all Jihadist brides aredriven by humanitarian motives. The tweetof a twenty-two-year-old mother of twofrom London, Khadija Dare, certainlyattracted attention when she bragged thatshe wanted to be the first woman to killWestern men. Her tweets are a mélange ofInternet slang, chat jargon, lower-class idi-oms (»da« instead of »the«), acronyms like»lol« (laughing out loud) or »omg« (oh mygod), combined with a few Arabic words togive it all an exotic flavor. She seems unableto get along without adolescent expressions(»lol« and »hahaha«). In August of 2014,Dare posted the following comment: »Anylinks 4 da execution of da journalists plz[please].Allahu Akbar. UK must b shakingup haha. I wna b da 1st UK woman 2 killa UK or US terrorist (sic!).« Upon seeinga corpse for the first time, another wo-man seems to have enjoyed herself no end:»Loool yes and seeing for the first time adead body looool hahahahaha that was sofunny.« Emotional brutalization or shock

in the presence of a bloody reality? Butthings get bloodier still. On Twitter youcan see a veiled woman wearing a white labcoat holding a severed human head in herhand.As yet the identity of the woman hasnot been established, but she may be a twen-ty-one-year-old British medical student.

Ever since the Islamic State (IS) wasproclaimed in the summer of 2014, theorganization has promoted these types ofInternet contacts, arrangedfor contact persons and re-ception centers, while of-fering tips for the journey(always book a round-tripticket and say you’re a tourist wanting tovisit Turkey). The offer is enticing: Theyoung people live rent- and tax-free, andpay no electric power bills, since IS takescare of everything. But the brave new worldof the Caliphate is by no means as egali-tarian as some people imagine.Westernerswho live in Ar-Raqqa »receive special treat-ment and are pampered by the organiza-tion,« writes one observer on al-monitor.»They get the best houses and cars, whilethe populace pays the taxes.« The localsare starving, but Western IS fighters don’tneed to give up their daily ration of Kitkat,7 Up, Nutella or Red Bull, according to aGuardian story of November 30, 2014.

Umm Layth, the Twitter propagandist,caters to the obvious expectation of youngfemale volunteers that they will have achance to take part in armed combat. Butnothing will come of it, girls! You are re-sponsible for your husband, children, andthe household, or perhaps at most for Sy-rian orphans and maintaining Internetcontacts. And any woman who does nottake a husband will live under state super-vision in a female community (maqar),something midway between a barracksand a cloister.»We are created to be mothersand wives. That is especially important torealize, since Western society has subtlydistorted your opinions about this by fos-tering a feminist mentality.« Umm Layth

Armed struggle?That will not getus anywhere, girls

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also knows that not all women from West-ern countries come from difficult lower-class family circumstances. »Most of thesisters I have met attended universities, andhave big, happy families, lots of friends,and promising careers ahead of them.«And, she adds, they have given all this upfor the sake of a life pleasing to God, whilelacking in luxuries and consumer goods.But please don’t forget to bring jewelryand cosmetics along with you, since thosethings are unobtainable here.

To be sure, we should take with a grainof salt reports that tell of young womenbeing passed from one mujahid to another.Only non-Muslim women, such as femaleYazidi or Christian captives, are consideredsexual fair game. Divorces following mar-riages lasting only three months, as in thecase of the nineteen-year-old Dutch wom-an Sterlina Petalo, and uncontested re-marriage are as much a part of everydaylife in the Sharia state as are crucifixionsand the amputation of hands.

But women’s brigades such as Al-Khan-saa or Umm Al-Rayan also assign tasksto women outside the home. Black-cladguardians of public morals, mostly fromWestern countries, make sure that dresscodes are obeyed and check to see whetheranyone is carrying weapons under the burqaor attempting to pass through a checkpointwithout being recognized. In addition, theBritish tabloid rag, the Daily Mail, reportsthat women’s brigades are supposedly usedto supervise brothels. That may be littlemore than sensationalist propaganda de-signed to satisfy Westerners’ lurid curiosi-ty, but in the long run tens of thousandsof young male fighters are not going to beconsoled solely by the prospect of 72 vir-gins in paradise. A sharia state knows thattoo. Nevertheless, the fighting morale of theforeign IS rebels seems to be on the wane.The adventure is not quite as excellent asthey may have imagined.At the end of De-cember, 2014, German media sources re-ported that the IS had executed 100 foreign

deserters, including some Europeans. TheLondon Independent put the number evenhigher, at 120. The background of the de-cline in morale seems to be this: IS rebelsare now less and less engaged in fightingthe real enemy, the Assad regime; instead,they are fighting one another, a turn ofevents that has caused a great deal of frus-tration and kindled the desire among someto leave.

The war zones in Afghanistan or Pa-kistan have never even remotely held asmuch attraction for young people as Syriadoes today. Living standards are higherhere, and besides, Syria is easier to reachvia Turkey. Moreover, unlike the Taliban, ISis not merely waging a campaign of na-tional liberation; it sees the Islamic state asthe embryo of an international geopoliticalspace under the banner of the Prophet.While the European left is discovering themotherland and appearing alongside right-wing populists in displays of patriotism,the flag of internationalism is being wavedtoday by radical Muslims. It is not hardto figure out how much of this can be laidat the doorstep of misguided policies ofintervention and invasion carried out bythe West in Afghanistan.

Syria is merely the territorial base of autopia, and this utopian element of a globalumma, which recognizes neither races nornations, has not failed to exert a pull onpolitically and religiouslyuninformed but potentiallyenthusiastic young people.Furthermore, it is question-able whether all of the volunteers who havebeen streaming into Syria from more than80 countries really want to attain the statusof martyrs in the manner of the Belgianconvert, Muriel Degauque, who died in Iraqin 2005 as a suicide bomber. For Europeansthe return home has become increasinglydifficult; indeed, it is only possible forwomen if they obtain their husbands’ per-mission. It is in that sense that we are tounderstand the delighted exclamation of

Lol – myhusband’s dead!

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a youthful hero’s widow: »Lol – my hus-band’s dead.« Between dealing with babybottles and making Nutella pancakes,youngwomen lead a more cloistered life than ourgreat grandmothers did, even though self-defense and military necessity may requirethem to handle a Kalashnikov and – truly– even to drive a car. But what is going tohappen to them once the dream of buildinga new Garden of Eden has run its course?

And what about their children, after theirfathers have been blown to bits as cannonfodder or when the latter, mutilated, trau-matized, and brutalized, start aiming theirautomatic weapons at new targets andvictims? There is still the prospect of a boxseat in paradise, even though, if you are awoman, you would have to abandon yourdream of having 72 attractive boys at yourbeck and call.

Karin Priestertaught sociology at the University of Münster and is on the advisory council of NG/FH. Her most recentpublication is Mystik und Politik: Ernesto Laclau, Chantal Mouffe und die radikale Demokratie (2014).

priestek@uni-muenster.de

Everything about the Ukrainian conflicttakes some getting used to, not least that ithas become by now the most dangerousfalling-out between the West and the Rus-sian Federation since the end of the ColdWar. Even the quirk of giving geographicalnames to political processes seems odd atfirst. Thus, for example, when the so-calledNormandy Group (not a place that auto-matically evokes positive associations)convenes in Minsk, then there is hope for adiplomatic-political solution to the con-flict. This was in fact the case when theparties agreed to »Minsk I« on September5, 2014, a pact made more concrete in theMinsk Memorandum of September 19,2014 with an eye to its planned implemen-tation.

But it wasn’t implemented. There neverwas any real truce, no withdrawal of heavyweapons to create a buffer zone, and cer-tainly not any concrete step toward theagreed-upon international supervision ofthe porous Russian-Ukrainian border. Anincomplete exchange of prisoners was the

only aspect of Minsk I that was actuallycarried out. The war went on with in-creasing numbers of casualties. This was ashocking experience for the West, whichfelt that the separatists and their Russianpatrons bore the chief responsibility forthe collapsed agreement due to their failureto deliver on their obligations. People inthe West then began to ask whether the EUapproach – staking everything on a politi-cal solution – still made sense if some ofthe parties simply ignored what had beenagreed to. No wonder a supposedly alterna-tive approach soon came under discussion:namely, arms shipments to the Ukraine.

What was to be done – just return tothe negotiating table and start all overagain? There was some risk that the nego-tiators and their backers would be made tolook silly. The German federal chancellorhesitated to accept the invitation to attendyet another Normandy meeting (whichwould include, besides herself, presidentsHollande, Poroshenko, and Putin) to beheld in Astana, Kazakhstan. A summit of

Gernot Erler

Last Exit Minsk

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this kind would only make sense if therewere well-founded expectations of its suc-cess. But right about the same time, thesituation on the battlefield reached a crisispoint. The separatists from the »People’sRepublics« of Donetsk and Lugansk madeenormous territorial gains and kept forcingthe Ukrainian units to retreat with grievouslosses. The guarantee of success had to berescinded. In the short run a new date andsite were chosen for the next Normandymeeting: Minsk (much closer to Europethan Astana is) on February 11 and 12, 2015.

Minsk II differs very little in substancefrom Minsk I.As its title suggests, it is actu-ally just a »package of measures to imple-ment the Minsk accords,« that is, thosefrom Minsk I. Nevertheless, there are im-portant differences between them. In eachinstance the thirteen individual pointscontain specific timetables for their imple-mentation.Then too, there is a political de-claration by the three presidents and theGerman chancellor committing them tosupport all of the measures agreed to onFebruary 12, 2015. In this way, the authori-ty of the heads of government is on theline. Non-fulfillment of the thirteen pointswould entail for them a serious loss offace and credibility.

However, the declaration of February12 issued by the four leaders also sends anadditional, important political signal. Ex-press support is given to the continuationof trilateral talks by the EU, Ukraine, andRussia on energy issues. In the interimthose negotiations in fact have been re-started, and with some success, at least inthe sense that time has been gained. More-over, other trilateral talks on the EU asso-ciation agreement with Ukraine, and itspotential conflict with Russian interests,are also given explicit backing in Minsk II.These talks already had gotten underwayin July, 2014, but had reached an impasse.Finally, the four leaders express their verbalcommitment to the »vision of a commonhumanitarian and economic space from

the Atlantic to the Pacific on the basis offull respect for international law and theprinciples of the OSCE« (Organization forSecurity and Cooperation in Europe).

Anyone can see what is meant by thesedeclarations: President Putin’s proposalfor a common economic area from Lisbonto Vladivostok first aired in 2010. The ex-press reference to international law andOSCE principles may notsit well with Moscow –after all, the West has beenaccusing the Russians ofignoring precisely thoserules by annexing Crimea and supportingeastern Ukrainian separatists. Neverthe-less, the three points set forth in the jointdeclaration are supposed to make one thingclear. The West, with the consent of Ukraine,is ready to enter into a dialogue aboutRussian interests and proposals for a neworder, while seeking constructive solutions.The signal being sent here means that thejoint commitment to »an exclusively peace-ful solution« can pay significant politicaldividends to Russia while making it easierfor president Putin to revise his previouspolicies without losing face.

So what makes Minsk II more prom-ising than Minsk I? The thirteen pointshave been formulated concretely; there arenow timetables for implementation; theheads of state and government have madea »guarantee declaration«; and the four-power declaration has been combined un-mistakably with a positive political signal toMoscow. The first few weeks after Minsk IIwere a mixed bag. The humiliating Debal-zewe debacle came at the very beginning.Even after the truce went into effect theseparatists, supported by powerful Russianforces, expanded their territory by seizingthis important transportation hub. Presi-dent Putin gave them the green light bymaking comments that appeared eithercynical or indifferent. But steps were alsotaken to implement the accord, a fact thatencouraged hope. After the seizure of De-

Commitment to»an exclusivelypeaceful solution«

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balzewe, the truce was widely honored whileheavy weapons were withdrawn on bothsides, a measure that eventually will createa buffer zone 50-140 kilometers wide underOSCE control.When that is accomplished,the long-suffering civilian population willgain access to humanitarian aid.

No question about it: There is still along way to go! Every step taken to imple-ment the agreement consumes time andenergy, and can be reversed almost over-night. Hence, it is becoming more andmore important to develop capabilities toobserve what is happening. The decisionto step up the OSCE mission on the groundwas long overdue, although – oddly enough– it has been difficult to find and assignsuitable, well-trained observers on shortnotice. Still, every effort is worthwhile, be-cause we are facing a »Last Exit Minsk«situation. If this second attempt should fail,that would automatically discredit Euro-pe’s commitment to a diplomatic and po-litical solution. Calls for arms deliveries toUkraine would become louder and moreinsistent, even though they cannot changethe fact that a military solution is off thetable. Russia, as a global military power,would resort to any means necessary toprevent a defeat of the Ukrainian separatistsby Ukrainian arms, and it has sufficientmeans to do just that. Given those facts, ifMinsk II were to fail, the only option wouldbe to launch a Minsk III, assuming thatsuch a thing were even politically workable.Hence, Minsk II must not be allowed to fail.

The political section of the February12 accord is devoted to a new Ukrainianconstitution that will facilitate a decentra-lization of the country, grant a special legalstatus to Donetsk and Lugansk, and restoresocial and economic relations with theconflict zones, including the payment ofpensions and taxes. All these are steps thatmay pave the way for a genuine de-esca-lation of the conflict.

But the accord is still not a masterplan or grand design that would regularize

future relations among the EU, Ukraine,Russia, and the Eurasian Economic Union.Those issues are reservedfor a post-Minsk processthat can only begin oncethe package of measures inthe current accord has been implementedstep by step.

This will be a painstaking process forboth Russia and the West. At first glancethe Russian side holds most of the cards,since Moscow has so-called »escalationdominance.« Hostilities can be brought toa boil at any time via Russia’s proxies ineastern Ukraine, while the EU continuesadhering to its pledge to settle the conflictexclusively through diplomatic channels.To President Putin it must seem enticingto continue his previously successful brandof »hybrid warfare.« He supports the rebelsin eastern Ukraine with weapons, volunteerfighters and camouflaged Russian troops.But at home he has used effective propa-ganda to make the domestic populace be-lieve that a Russian-speaking minority isdefending itself against the pressure, if notthe genocidal designs, of a »fascist junta«that has recently seized power in Kiev.Of course, their Russian brethren cannotremain indifferent to the plight of this em-battled people. TV broadcasts show imagesof more than fifteen aid convoys, whereasthe military intervention has been consis-tently denied in the face of all – even inde-pendent – observers’ reports. This is atypical feature of the modern hybrid styleof warfare, commonly called »plausibledeniability.«

But what do you do if, for whateverreason, you want to extricate yourself fromthis kind of politics, in which you havestrengthened the national conservativeforces at home and endeared yourself tothem due to your ruthless policies towardCrimea and eastern Ukraine? When wetalk about the prospects of Minsk II, ourgaze suddenly shifts to the Russian do-mestic policy scene. To this very day it is

Still nomaster plan

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still being shaped by Putin’s speech in theKremlin’s George’s Hall, delivered on March18, 2014, in which he lauded »reunification«with Crimea while condemning his criticsas »national traitors« who were encour-aging a fifth column. In this way he practi-cally forced them out of Russian society.Since then the treatment of the oppositionand critical civil society has become farmore brutal; in general, an atmosphere ofaggression and hatred has begun to per-vade society.

Regardless of which assassins or ac-complices are arrested for the brutal murderof the Russian opposition politician BorisNemtsov on the night of February 28, 2015,the crime has to be ascribed to this inflamedsocial atmosphere, which has become anintegral part of hybrid warfare. As always,

all sorts of conspiracy theories are makingthe rounds. One such theory holds that thebloody deed,carried out under the windowsof the Kremlin, was a warning signal byhardliners to the President not to overdohis willingness to compromise in the Minskprocess. That would suggest that the forceswhich the President himself has empoweredare now staking their claims upon Russianpolicymaking on the Ukraine issue. Thentoo, at last report, Nemtsov was supposedto be working to document Russia’s mili-tary intervention in Ukraine, a project thatwould have undermined the »plausibledeniability« of its involvement there.

There are many other speculations, butby now one thing is clear: Whether LastExit Minsk is taken or not depends partlyon the internal evolution of Russian society.

Gernot Erleris a member of the Bundestag, the lower house of Germany’s parliament. He coordinates the federalgovernment’s inter-societal cooperation efforts with Russia, Central Asia, and the countries of the EasternPartnership.gernot.erler@bundestag.de

The American philosopher Martha Nuss-baum summed up her study of ways toovercome the politics of fear (The NewReligious Intolerance: Overcoming the Poli-tics of Fear in an Anxious Age, 2013) as fol-lows: »Our time is genuinely dangerous.Aswe have seen, many fears are rational, andappeals to fear have a role to play in a so-ciety that takes human life seriously.« Herremark calls to mind the epoch-makingidea of American president Franklin D.Roosevelt that freedom from fear ought tocount as one of the crucial fundamentalrights of our time, and that any democracyworthy of the name ought to insure thatit is respected.

That is the reason why modern gov-ernments should neither deny nor repressthe anxieties that continually well up fromthe depths of the human psyche by attempt-ing to conceal them behind a glitteringfacade. Instead, they should face them open-ly and with a sense of responsibility. Thecrucial first step in this direction is to ac-knowledge the anxieties; the second is torely on reason to trace them back to theirconcrete causes, i.e., the factors that reallyshould be feared, so that they may be over-come by a common effort. In this veinRoosevelt phrased his appeal to his coun-trymen in the following way: I know yourfears, and together we will conquer them –

Thomas Meyer

How to Defeat Fear-Mongering: Take Fears Seriously

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not by weeding out the weaker, but by in-cluding everyone in the quest for the bestsolution.

Adopting that principle, the New Dealcrafted policies against fear that workedwell and – no less important – were widelyaccepted throughout society. Thus, Amer-ican policies to bolster civilization duringthe Great Depression stand in stark con-trast to the National-Socialist policies de-signed to instrumentalize fear by annihi-lating social minorities previously cast asscapegoats.Those policies took the shortestroad into barbarism.

In brief, fear can be a good or badguide, depending on how we use it: in anopen, inclusive spirit or in a crabbed, ex-clusionary way. It is irresponsible to in-strumentalize existing fears for demagogic

purposes. In that case, is-sues about which societyneeds to reach a shared,reasonable consensus getpushed off into the realm

of the irrational. Scapegoats are createdon whom people can vent their pent-upanxieties. The latter process amounts toignoring the real causes of those anxieties.By contrast, it is rational to confront fearson a political level, since we then can trans-form vague dangers into well-founded ap-prehension of clearly identified threats,thereby motivating people to undertakethe common efforts required to overcomethem. For example, the fear experienced bythe supporters of the anti-immigrant or-ganization known as Pegida (PatrioticEuropeans against the Islamization of theWest) is real, and its original motives wererespectable. It was not until the organi-zation was diverted into creating broad-brushstroke images of Islam as the enemyand attacking the media and the »politicalcaste,« that its strategies proved to be re-prehensible and dangerous. A movementsuch as Pegida will never enable us to findand eliminate the true causes that havegiven rise to such fears.

We may cite two examples of ways inwhich fear can be dealt with productively:»the social democracy of fear« spoken ofby Tony Judt in Ill Fares the Land and the»heuristics of fear« described in Hans Jo-nas’ book, The Imperative of Responsibility.Both continue to be relevant because theyappeal to a specifically defined anxiety orfear, which can be converted into a power-ful motive for a brand of politics that is inthe common interest. Such a politics wouldseek to avert a pressing danger that is re-ceiving too little attention because of oursociety’s penchant for repressing unpleas-ant phenomena. The two authors particu-larly seek to address latent fears in order toavert the dangers inherent in them whilethere is still time to do so. There is a riskthat, if one waits too long to confront fears,the very thing that people fear may cometrue. Judt is concerned with reinforcingthe social foundations without which nomodern democracy can last, a project theimportance of which increasingly is beingforgotten.

Democracy itself is in danger, becausewe tend to forget the reasons that led to thesocial-democratic compromise in the firstplace: reasons associated with the GreatDepression in the United States and Scan-dinavia and its aftermath in ContinentalEurope. It is that compromise that fur-nishes the solid underpinning of democ-racy wherever it has endured. Today, theunprecedented advantages of that historiccompromise are so taken for granted thatwe are barely aware of its existence. Thememory of its social origins in the existen-tial crisis of democracy is fading. What wedo see, by contrast, are its disadvantages,although these are relatively minor. Forthat reason younger people, especially,neither grasp its attractiveness nor feel anyurgency to preserve it. And that rendersthem defenseless against the attacks ofthose who have been waiting a long timeto corrupt the moral foundations of thesocial democratic compromise.

It is rational todeal with fears on

a political level

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The social democracy of fear ought tobe a wake-up call for the entire society, re-minding us that the fate of democracy inEurope would be sealed if we acquiesce inthe dismantling of its historical founda-tions. If we could mobilize anxiety, and/orthe concrete fear of what would happento most people if those foundations weredestroyed, we might be able to create anemotional and social power capable of re-sistance. It would be comparable to the his-torical anxieties that originally moved thegreat beneficiaries of the capitalist marketeconomy and the workers’ movement toreach the social democratic compromise.The latter included several key clauses: themarket economy, yes, but only if supple-mented by political regulation and theuniversal social state; private ownership ofthe means of production, yes, but only whenstrictly limited by labor laws and the powerof labor unions (economic democracy).

By means of this appeal to fear, Judthopes to recreate the experience that oncemade the social democratic compromiseso compelling to the entire society andthereby insure that people will not have torelive it in reality all over again.

Hans Jonas’ concept of a »heuristics offear« can be compared to Judt’s approach.

He is proposing a method that would en-able and motivate us to oppose the de-struction of the natural foundations ofcivilization before it is too late. It entailsthe imperative to think concretely aboutthe risks and dangers that might arise underthe worst case scenario whenever we under-take large-scale interventions in nature,ones that might threaten the natural sys-tems upon which life depends. We are toimagine as vividly as we can the experi-ences that we would be inflicting on succes-sor generations due to our actions in thepresent. The heuristics of fear is supposedto force us to break through the armor ofrepression (»Oh, it could never be thatbad«) before we act, so that we can do jus-tice to our obligations vis-à-vis the gene-ration to come.

Obviously, anxieties will always bepresent wherever human beings live andact, and their realistic core is mostly pro-ductive. Their repression rarely results inanything good and never lasts long.For the»risk society« that we currently have, theexamples adumbrated above show howfears can be dealt with in a productive aswell as socially and ecologically sustainableway. In that respect they may point the waytoward a better approach to fear.

Thomas Meyeris Professor of Political Science (emeritus) at the University of Dortmund and editor-in-chief of the journalNeue Gesellschaft/Frankfurter Hefte. His most recent books include What is Fundamentalism? (VS Press)and Die Unbelangbaren: Wie politische Journalisten mitregieren (edition suhrkamp, 2015).thomas.meyer@fes.de

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A deep crisis is paralyzing the societiesof the West. The outsourcing of manu-facturing to emerging economies has crea-ted a »precariat« excluded from economic,social, and political life. The middle classes,already hard-pressed by decades of stag-nating real wages, fear that they might suf-fer the same fate in the digital economy.More and more people are asking whetherdemocracy still gives them any say, or isin fact one of the drivers of this disen-franchisement. Little has been done to reinin casino-style capitalism. Under the pres-sure of the financial markets, the seminalproject of European unification is about tocollapse. The old certainties are starting tocrumble. The next Great Transformationhas begun.

Digitalization, robotization, and arti-ficial intelligence will change the way wework and live. Genetic engineering andnanotechnology are changing what it meansto be human. The revolution in informa-tion technologies has shown how quicklydisruptive innovations can shake up entireindustries. The next industrial revolutionwill once again come from garages. Digitaltools like 3-D printers allow us to manu-facture everything from a cup of coffee tovital organs with the click of a mouse. Thehousehold of tomorrow will be a micro-factory and a micro-power plant in thesame way that today’s social media haveturned it into micro-broadcaster. Devel-opers and makers, sellers, and buyers areconnected worldwide through the Inter-net of Things. Techno-utopians view thisdemocratization of the means of pro-duction as nothing less than the greatestemancipatory leap in history.

Nevertheless, today our imagination ofthe future is dominated by bleak dystopias.Many have come to understand that thepolitical economy of tomorrow still will be

dominated by power-political interests,albeit perhaps different ones. Google andCo.have shown how power can be concen-trated even within the allegedly flat world.In the NSA scandal, the old surveillancestate rears its head. Cyber-attacks offer afirst glimpse into the wars of tomorrow.The social gap between »technical haves«and »have-nots« will continue to widen.Does democracy have a future if the middleclasses lose out due to digitalization?

If we want to live in a sustainable worldcharacterized by social justice and soli-darity, the economy of tomorrow needs tobe ordered and regulated.This self-evident truth,however, is far from beingshared by everyone. Toomany still place their trust in the invisiblehand of the market. What they forget isthat the first two industrial revolutionsnever would have happened without theinfusion of state resources on a grand scaleand the application of coercion. Otherstend to overlook the fact that economicdevelopment is too often accompanied bydispossession, eviction, and exploitation.Every change produces winners and losers.The elites, who owe their status and privi-lege to the status quo, have a lot to lose.Often the established middle class feelshard-pressed by emerging classes. Stillothers sense that their identities are threat-ened by the rapid shift in social norms. Fi-nally, there are those who welcome changein general, but just not in their backyard.Modernization produces the forces thatresist it.

In short, a new order does not emergenaturally, but can only be the outcome ofprotracted transformational conflicts be-tween the forces of inertia and progress.However, such conflicts are not alwaysframed in those terms; instead, they tend

Marc Saxer

Shaping the Next Great Transformation

The politicaleconomy of change

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to be viewed as cultural questions thatinvolve religious, ethnic, gender, or raceidentity. In that cultural framework, it is alltoo easy to cast minorities as scapegoatsfor the alleged moral decay that society isexperiencing. The resulting political block-ades benefit those who have the most tolose in a new order. Meanwhile, otherspluck the chords of identity politics master-fully in order to advance their own eco-nomic interests.

At the same time, there is a struggleover the direction of change.Whoever getsto frame this struggle will have the powerto define the trajectory of policymakingfor years. Over the past three decades,neoliberals successfully have framed theirmarket radicalism as »economically rea-sonable and rational,« which has allowedthem to paint opponents as defendersof the status quo who ultimately wouldendanger our collective well-being. Thisextraordinary power of definition not onlysurvived the financial crisis, but allowedconservatives to depict it as a crisis of thewelfare state, thereby making the case forthe next wave of structural adjustmentsunder the banner of »austerity.«

If the coming Great Transformation isto be shaped in a progressive way, threemajor challenges must be met. To win thestruggle over definitions, a practical utopiaand a convincing narrative of change areneeded. To implement the shift in the devel-opment path against the defenders of thestatus quo, a broad coalition in favor ofsocial change must be mobilized. Finally,to institutionalize the new order, new me-chanisms must be created to organize thepolitical process.

The last Great Trans-formation was given itsdefinitive form by socialdemocracy. On the basis

of a social democratic social contract, acomplex architecture of institutions wasbuilt with the aim of taming capitalismand harnessing its creative powers for the

common good. Without the century-longstruggle between capital and labor, thisinclusive social contract never would havebeen possible.

Today, social democracy is strugglingto shape the next Great Transformation.With the decline of the proletariat, themovement lost its »historical subject.« So-cial democratic mass organizations, politi-cal parties and labor unions are essentiallycreations of the centralized, hierarchic,and standardized industrial society. Thevery notion of policymaking, reflective ofthe industrial process of universalizationof standardized norms, today seems to beat odds with the pluralistic, decentralized,differentiated society with its manifoldspeeds and contrasting life-worlds. Ac-cordingly, social democratic answers tothe challenges of the industrial age nolonger satisfy the needs and demands ofthe emerging society. Social insuranceschemes, for instance, are premised on life-long formalized employment, and seemill-fitted for the informal, highly flexible,international types of employment typicalof the post-industrial economy. In short,to shape the Third Industrial Revolution,the old formulas will not do.

Above all, however, the traditional labormovement is no longer strong enough toshape the struggle over the new order, ifleft to its own devices. Hence, new alli-ances among all progressive forces must beforged. The challenge is to build a platformon which heterogeneous groups with oftendivergent interests can join together. Thisobservation suggests that a coalition basedon the lowest common denominator can-not generate enough political muscle towin the struggle over the new order. Whatis needed is a transformative compromiseas the inclusive foundation for the newsocial contract.

To mobilize the masses and persuadethem to work together for social improve-ment, a concrete and achievable vision of abetter tomorrow is required (»Change you

The historical roleof social democracy

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can believe in«). Practical utopias have along tradition within all progressive move-ments. However, under the British TINAprinciple (»There is no alternative«),utopianthinking has gone out of fashion. Today, wehave to realize that the very lack of viablealternatives on the political left has openedthe door for right-wing populists. To formand keep together a broad coalition in be-half of social change, a compass is neededto point the way toward a better future.

At least the search for alternatives tomarket radicalism has begun. Under suchclunky titles as »Industry 4.0,« »Zero Mar-gin Society,« or »Green New Deal,« prac-tical visions for a new economy are beingput forward. What these somewhat tech-nocratic models have in common is theirfaith in new technology. The social costs oftechno-economic change, not least growinginequality and exclusion, are often ne-glected. The crisis of social justice is ad-dressed by inclusive growth models, whichunfortunately often fail to come up withanything more than warmed-over Keyne-sian redistributive policies. More excitingare models that envisage socially just, ro-bust, and green dynamic growth. This isthe formula to which more than 200 Asianand European thinkers have pledged alle-giance within the »Economy of Tomorrow«project. Similar models have been for-mulated by UNDP, OECD, and even theWorld Bank.

Dry models of economic theory areuseful to orient the technocratic imple-mentation of transformative policies. Tomobilize the muscle for their political im-plementation, however, a vision of a bettertomorrow for all is needed. What such apractical utopia might look like has beenoutlined by the thinkers of the European»Good Society« project.

Social democracy has an importantcontribution to make here: namely, work-ing out the terms of a blueprint for theGood Society. Its crucial clause will featurean inclusive compromise among all socialclasses, still the best starting-point for thenew social contract.

What would a common platform for abroad coalition in favor of social changelook like, and how could such an inclu-sive compromise be reached? The Asianthinkers brought together by FES in the»Economy of Tomorrow« project pointto Amartya Sen’s seminal capabilities ap-proach as a way to create that platform.The Harvard philosopher has identifiedthe complete realization of human »capa-bilities« as both the prerequisite and thegoal of development. That approach is,first of all, a social compromise betweenthe middle class, which demands a merit-based social order, and the majority popu-lation, which aspires to work its way up thesocial ladder. It is, moreover, an economiccompromise between capital, which seeksinnovation and productivity gains, andlabor, which expects better qualificationsto pay off in the form of improved work-ing conditions. In the knowledge economyof the future, the capabilties approachwould spur growth by activating the fullcreative, entrepreneurial, and organiza-tional potential of each individual. Finally,the capabilities approach offers a broadpolitical platform on which a wide spec-trum of social groups – ranging from laborto responsible entrepreneurs, from civilsociety activists to technocrats, from pro-gressive intellectuals to minority groups –can join forces. »Full capabilities for all«can serve as the rallying cry for the com-mon struggle to shape the economy of to-morrow.

Marc Saxeris the coordinator of the Friedrich Ebert Foundation’s »Economy of Tomorrow« project in Asia. He cur-rently heads the FES’s office in New Delhi, India.

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The world market has been in the workssince at least the end of the fifteenth centu-ry, although it has come into being in quitecontradictory ways, as Fernand Braudelpointed out in his three-volume work Civi-lization and Capitalism; 15th-18th Century.On account of the »great discoveries« madeduring that era, the economy was on its wayto becoming modern, global, and capitalist,while around the same time, in 1648, themodern nation-state system was christenedat the talks in Münster and Osnabrück thatled to the Peace of Westphalia. Nation-states with boundaries versus the bound-lessness of markets, political regulationand economic deregulation, free trade andprotectionism, the imbedding of the eco-nomy in society and nature: These are thepoles between which high-tension histori-cal conflicts arc and which have definedsubsequent scholarly and political dis-courses. One would not go far wrong inobserving that present-day debates aboutthe Trans-Atlantic Trade and InvestmentPartnership and similarly constituted agree-ments such as TPP, TiSA, and CETA featurethe same tension between the economyand politics, the market and the state, de-regulation and regulation.

At the beginning of the nineteenth cen-tury David Ricardo, one of the most emi-nent founders of political economy, ex-plained what the expansion of foreign tradewas supposed to achieve. It should insurethat more »food and necessaries of thelabourer can be brought to market at a re-duced price.« Because wage costs fall,prof-its rise. Ricardo then draws the conclusion– for which he has been revered ever since– that foreign trade is »highly beneficialfor a country.« But even in Ricardo’s timedoubts arose concerning this theory, someof them formulated by the German eco-

nomist Friedrich List. Ricardo and otheradvocates of the free trade doctrine stakedall of their hopes on the stimulating effectsof free competition, the pressure to per-form, material incentives, the quest forprofit, and innovative ideas that economicactors would hit upon once the frameworkof a functioning market economy had beenestablished.

But the liberal framework would beunavailing unless the productive forces ofthe nation had been improved, for example,through science, infrastructure enhance-ment, policies designed to create a moderneducational system, and the promotion ofregional economic development. None ofthis can be achieved as long as the marketremains free and has not been imbeddedin the social and natural environment. Theeconomy needs to be ordered by industrialpolicy.

In short, the state and social institutionsgive structure and shape to the economy.But for centuries there has been muchcontroversy in free trade theory over thequestion of how these shaping functionsmight be performed most appropriately.This is the case because, in the global capi-talist market, the conditions of competi-tiveness vary markedly from one locationto another. There are multiple reasons forsuch disparities. They involve the »factorendowment« of a place, the distribution ofresources in a given locale, the value of itscurrency, and unit laborcosts.

Not only do states per-form a shaping function.They also have protectiveresponsibilities which their own security-hungry populations have demanded thatthey assume, often in violent class conflictsover regulation under the auspices of the

Elmar Altvater

The »Crass Utopia« of Free Trade and its Alternative:Solar power plus solidarity

The »satanicmills« of theunfettered market

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social welfare state, unemployment insu-rance, old-age pensions, health insurance,housing, education, and child-care.As KarlPolanyi has emphasized, disimbeddedmarkets – the mantra of the free tradedoctrine – are »satanic mills« for the com-modities traded on them: labor marketsfor labor power, markets for nature (nowtreated as natural capital), and financialmarkets for money and currencies. That isthe reason why there has always been a»double movement« in history: on the onehand, you have liberalization and dis-imbedding of markets coupled with mea-sures to deregulate and privatize publicgoods and services; on the other hand,you have movements to protect societyfrom the satanic mills of the unfetteredmarket. As Michael Brie has shown in hisbook Polanyi Neu Entdecken (English:Rediscovering Polanyi), both movementshave been limited by the system of socialand economic coordinates characteristicof the capitalist order in society. For thatreason, the one movement does not passbeyond the liberal or neoliberal paradiseit has conjured up,while the other does nottranscend the restricted horizon of capi-talism.

This is the »strange attractor« familiarfrom chaos theory, toward which all fur-ther developments tend to drift, almost asif propelled by fate. The crises in capitalistaccumulation do not prevent it. They aresimultaneously destructive and creative, asJoseph Schumpeter remarked; hence, inthe long run they stabilize the system as awhole. Even great fortunes that continuegrowing in the course of the accumulationprocess do no harm to the system, despitethe fact that their owners become so politi-cally powerful that no labor union couldmake headway against them even if itwanted to. Technical progress, which reallyshould be one path toward emancipation,merely perfects the »cage of bondage« fromwhich it is both dangerous and difficult toescape.

For these reasons most people, at leastin the wealthy countries around the globe,have made their peace with »really exist-ing capitalism.« In places where this ac-commodation has not happened, chaoshas erupted: including the territories offormer states in the Middle East fromSyria and Libya to Iraq and Afghanistanas well as in the expanding regions of feralcapitalism.Without such accommodation,the power of the state is often capturedby gangs, while religion is invoked tojustify and embellish a primitive form ofbrute domination. Meanwhile, those re-gions are beset by an interventionist powerthat knows only one way of operating:reliance on secret services and militarymight.

Even in developed parts of the worldthere are many people who are disinclinedto put up with the unreasonable demandsof capitalist development. This is so be-cause the planned liberalization of worldtrade will be so ruthless that a consolingslogan like »creative destruction« beginsto sound like unvarnished cynicism. Amajor portion of the protection affordedto labor power, nature, and currency values,hard won over decades of struggle, will besacrificed on the altar of disimbeddingenvisaged in the new free trade accords.Even democratic procedures will fall bythe wayside. The one thing that will surelycome to pass is the increase in profits sofulsomely praised by Ricardo, especially inthe form of higher returns for financialcapital. That outcome dovetails nicely withthe interests of the most important actorsin modern, finance-driven capitalism. It isall about the bottom line.Wealth increases,the »haves« do very well, while the »have-nots« must pay a high price: dismantling ofthe social safety net, dangerous games withthe climate and long-term nuclear wastedisposal, adverse effects on species diver-sity, and the plunder of the planet’s resour-ces. One could add still more items to thebill being presented to the »have-nots«:

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financial markets will be destabilized anddisastrous financial crises conjured up;income, wealth, and opportunity will bedistributed in increasingly unequal waysin the modern world; and, last but not least,democracy itself will be eroded and giveway to a post-democratic system.

It is possible to prevent these impend-ing disasters. As Karl Polanyi has written,neoliberal society, characterized by mar-kets disimbedded from society and nature,amounts to a »crass utopia.« Because ofits tendency to recurrent crises, the freemarket cannot work well in capitalism evenin a purely economic sense. On the sociallevel, stability will be well-nigh unattainablesince global society is so fragmented thatconsensus is lacking. And on the politicalfront, legitimacy and democratic consentwill be absent for most decisions to theextent that they are guided by Ricardo’slogic, using free trade as a vehicle of profitmaximization.

There is an alternative which can beexpressed in the slogan, »solar power plussolidarity.« We should not forget that theidea of free trade arose more or less con-temporaneously with the industrial revo-lution, the phase of capitalist accumulationthat Marx depicted as the »real subsump-tion of labor (and, we would add, of natureas well) under capital«. Thus, one mightsuppose that the age of fossil fuels iscoming to an end as we reach and pass thepeak oil stage (at which half of all theearth’s proven oil reserves will have beenexploited already) and come to grips withthe climate crisis. If so, then perhaps thefree trade system will also run out of gas,forcing us to look for alternatives. In thatcase the hype surrounding TTIP andCETA would prove to be the final laparound a track where soon a stop sign willbe put up reading: continue at your ownrisk.

Nature has morphed into naturalcapital, a category that has found solidmoorings in neoliberal thought. Labor

power, the substratum of variable capital,has become human capital. Thought thatmoves along these lines – and the ac-tions that flow from it – canscarcely even imagine anon-capitalist economy, norcan it easily envisage a so-ciety based on solar powerand solidarity in which mar-kets are imbedded in society and nature.Yet that is exactly what we need, becausethe fossil-fueled journey is coming to anend.

The neoliberal remedy, which pre-scribes disimbedding, will not be able tocure the deficiencies of this world, as his-tory itself demonstrates. Utopias are in-dispensable if we are to map out the path-ways toward a solar-powered, solidarity-based future. The basic idea is simple.Contrary to what Ricardo and his latter-day successors believe, international tradeshould not be thought of as a means to in-crease profits. Instead it should be con-ceived as an exchange of commodities andideas and a means to deepen the divisionof labor, culture, and science. Cooperativeeconomies sustained by social movementswill tend to produce for local and regionalmarkets and networks. They do not needto rely on the disimbedded markets inwhich mainly big corporations and supplychains operate. In any case, it will be hardto keep such markets going once we runout of fossil fuels and other resources. It isbetter to train ourselves now to work withalternative forms of life and productionthan it is to deregulate all boundaries andarm ourselves for a final »catch as catchcan« free-for-all.

Even the Bush administration wasahead of its time when it commissioned areport in 2005 that was to investigate theadjustments that would have to be made aswe approached peak oil, an event thenexpected to occur very soon. The ensuingHirsch Report concluded that we wouldinevitably have to get off of the fossil-fuel-

Nature hasmorphedinto naturalcapital

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driven industrial development path, andshould do so right away. For a brief periodthe Bush administration took down thestudy from the Web. Apparently it is betterto go on with business as usual than to

respect the limits of nature and society andstrike out on a new path of developmentbased on democracy, solidarity, and solarpower. But we also know this: Life pun-ishes those who come too late.

Elmar Altvaterwas Professor of Political Science at the Free University of Berlin from 1970 until 2004. He has numerouspublications to his credit dealing with globalization, global environmental problems, as well as the futureof European integration.altvater@zedat.fu-berlin.de

When Thomas Piketty’s book, Capital inthe Twenty-First Century, was translatedinto English and German in 2014, it metwith rave reviews. The author promised toilluminate the inner laws of modern capi-talism, highlighting its inherent tendencyto divide society into rich and poor. Theunderlying problem that Piketty addresseshead-on is the worsening of inequality inboth income and wealth, a trend observablein many societies since the 1970s. Howcould it be explained? Could the growingwealth and income gap be justified? Whatwere its implications for society and poli-tics? The author, a French economist, hasdelved far back into history to find an-swers to those questions. His work can beseen as simultaneously an economics textand an historical inquiry. This is anotherrespect in which his work differs from thatof mainstream economics, which he criti-cizes severely.

Although the book has been the targetof considerable – and evidently increasing– criticism from within the economicsprofession, it is a great roll of the dice,a »work for the ages« (Hartmut Kaelbe).Atleast in terms of its treatment of inequali-ties of wealth, which are increasing again,that is a valid judgment. Piketty is tackling

one of the most explosive social problemsof the present day.

Among the book’s signal achievementsis the compilation of new statistical dataon the distribution of wealth from the lateeighteenth century up until today, par-ticularly in certain European and NorthAmerican countries. The data are basedmainly on tax records.While it may be un-certain on matters of de-tail, the statistical analysisprovides a reliable accountof overall trends and sug-gests a new way to under-stand the periodicity ofeconomic history. In thestill predominantly agrarian French andEnglish societies around 1800, inequalityloomed large. The top 10 % owned nearly90 % of the national wealth, while the top1% held about 50 %. In other words, greatinequality predated the emergence of in-dustrial capitalism in the nineteenth cen-tury, although the latter slightly aggravatedit. Inequality reached its zenith around1910, more markedly in Europe than inNorth America, which at the time was stillmuch more egalitarian.

Piketty diagnoses a clear decline ofinequality in the age of the world wars of

Jürgen Kocka

Piketty on Inequality

Great inequalitypredated theemergenceof industrialcapitalism

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the twentieth century. He ascribes it mostlyto the devastation caused by war and eco-nomic crises, especially as they caused greatfortunes to implode. But he also mentionsthe ways in which taxation and social wel-fare policies, coupled with rapid economicgrowth, insured that inequality did notsoar again during the century’s third quar-ter. Whereas the top 10 % in England andFrance had owned 90 % of total nationalwealth around 1910, their share fell to just60-70 % by the 1970s. During that samespan of time the wealthiest 1% in thosetwo countries saw their share sink from60-70 % to just 20-30 %. So far as we cantell, this was a general trend that emergedin similar fashion in both the USA andother European countries.

By contrast, inequality of wealth clearlyhas been on the rise since the late 1970s. Ina few countries such as the by now highlyinegalitarian United States (though not inEurope) inequality of wealth has once againattained the levels at which it stood in 1914.Piketty appears to see this as a return to thenormal pattern endemic to capitalism oncethe catastrophes of the twentieth centuryhad passed into history. However, he iden-tifies some additional causes contributingto the growing income gap, including ex-orbitant salaries paid to managers, deregu-lation, and the dismantling of redistributivetax and welfare state policies under the aegisof the neo-liberalism of the last few decades.

The second chief contribution of Pi-ketty ’s book is especially provocative. Heargues that, in the long run and on average,incomes derived from the ownership ofcapital will outstrip the rate of macroeco-nomic growth as well as income derived orderivable from labor. This means that, overthe long haul, those who depend on gain-ful employment for their income (parti-cularly wage labor) will lose out to thosewhose income flows from wealth (e.g.,interest and dividends). The concentrationof wealth is proceeding apace, and theshare of that wealth derived from inheri-

tance rather than having been earnedthrough the efforts of the wealth-holdersis also increasing. Piketty thus describesinequality as the consequence of marketmechanisms inherent in capitalism underthe legal regime that now exists, and not– to cite one alternative explanation – asa case of market failure. He expects thistrend to continue in the future. He warnsof the great dangers of »patrimonial capi-talism« in which rewards are doled out onthe basis of family connections, i.e., to theheirs of those who were successful in thepast, rather than to current high achievers.He sees this anti-meritocratic inequalityas a challenge to fundamental democraticvalues in Western societies, which holdthat inequality is to be justified solely onthe basis of »rational« and »universal«principles and ultimately must benefiteveryone.

To prevent that from happening, Pi-ketty would introduce a progressive in-heritance tax on a global scale with a mar-ginal rate of more than80 % as well as high levieson wealth – at least 10 %for billionaires. He knowsthat this is a »utopian idea«that has no chance of being enacted. That isthe case because, for the foreseeable future,there is no quasi-state mechanism at theglobal level with the power and legitimacyto put a scheme like this into effect.

Besides pillorying Piketty for havingproposed such an unrealistic solution,critics also rightly point out that he has notfully clarified the distinction betweenfunctional distribution (of income fromvarious sources of capital and labor) andpersonal distribution (of wealth betweenthe top tenth or hundredth and everyoneelse). The critics note that his analysis ofinequality focuses intensively on the upperechelons of society, while neglecting bothinequality at the middle and lower ends ofthe wealth and income pyramids and otherdimensions of social inequality.

A progressiveinheritance taxon a global scale

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There is also good reason to doubtwhether the edge enjoyed by real returnson capital vis-à-vis macroeconomic growthrates and income trends from gainful em-ployment really represents a natural law ofcapitalism. Aren’t circumstances changingfundamentally in light of the global glutof money and the impending shortage ofskilled labor due to demographic shifts?Critics have been right to point out thatPiketty never actually analyzes the effectsof labor markets at all. Nor does he reallyinvestigate the complex nexus betweenthe productive and inequality-generatingfunctions of capital within capitalism.

Still, his is a pioneering work. In addi-tion to the considerable progress in em-pirical knowledge that it achieves, Piketty’sbook puts some central questions on theagenda of the present and gives reason todiscuss them in a new light, even in waysthat supersede Piketty’s own conclusions.I would like to emphasize three topics fordiscussion:

1. Piketty makes it clear that the mostglaring cases of income and wealth in-equality are not limited to countries withcapitalist economic systems. The principle»the more capitalistic, the more inegali-tarian« does not stand scrutiny. Inciden-tally, this observation is confirmed by thefamiliar rank-ordering of countries ac-cording to the degree of income inequalityindicated by their respective Gini co-efficient scores. African and Latin Ame-rican countries top that list. If one were toundertake a comparative study from theperspective of universal history, it mightturn out that the advent of modern capi-talism and the social and political changesthat often accompany it have actually ledto a decline in inequality, rather than anincrease.

2. Piketty’s statistical series show thatcapitalist systems vary widely in respect tothe levels of wealth and income inequalitythey display, as measured by both tempo-ral and international comparisons. It is

likely that Piketty is overestimating the im-pact of the wars and crises of 1914-1945 inreducing inequality. Moreover, his studiesof the third quarter of the twentieth cen-tury are not precise enough. In that erasome countries, relying on economic, so-cial, and fiscal policy, evidently managedto slow down and compensate for capi-talism’s inherent tendency toward grow-ing inequality of income and wealth. Thatepoch shows what might be accomplishedby political means. Indeed, internationalcomparative statistics on distribution basedon the Gini coefficient – which Piketty doesnot use – confirm that impression. If oneconsiders carefully the distribution of grossincome (i.e., before taxes and transfer pay-ments) in OECD countries, one sees, forexample, that Germany ranges alongsidethe USA and Great Britain in the top thirdof the Gini hierarchy and thus counts asone of the more unequal countries in thisregard. But if one goes on to look at net in-come distribution (i.e., after taxes andtransfer payments), one finds that Ger-many is now in the bottom half (and thusbelongs among the less unequal coun-tries), while the USA and Great Britain,along with Chile, Turkey, and Israel, oc-cupy the top echelons and are thus leadersin respect to income in-equality (figures from2011). The Scandinaviancountries, which also havecapitalist economies, display still less in-equality. Politics makes all the difference,especially social and tax policies.

3. Nevertheless, it remains the casethat there is an internal connection be-tween capitalism and the increase in in-come and wealth inequality.When marketsare left to their own devices, they usuallydon’t tend to generate greater equality. Itis possible to use politics to counteractmarket tendencies, and we should do thatmore resolutely than we have so far. Ex-orbitant inequalities of income and wealthfly in the face of democratic expectations

Politics makesall the difference

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that society ought to strive for equality andfairness. Furthermore, they undercut thefundamental meritocratic principles ofthe capitalist-bourgeois systems, the truesource of their power and historic supe-riority. For example, the inheritance taxcan be employed much more than it is atpresent to correct hypertrophic inequali-ties of wealth. If one believes Piketty, whorelies in this instance on French experi-ences, the minimum wage will turn outto be another factor that might mitigateincome inequality. Other approaches arepossible as well.

But even if we made more determineduse of the means at our disposal, the socialwelfare state and the tax code, disparitiesof income and wealth would still remainenormous. Lamentable on political andmoral grounds, such persistent inequalitysuggests two conclusions, one practicaland the other theoretical.

For one thing, we could take steps tominimize the social and political ramifi-cations of inequality, as has been done al-ready (albeit more in Germany, for example,than in the United States).The chief meansfor achieving that end is to arrange mattersin some of the highly relevant spheres ofsociety like health care and education suchthat access to them depends very little ornot at all on the economic resources ofthe individual in question. Or, one can makeit more difficult to translate economic ad-vantages directly into political power, say byputting limits on campaign contributions.

There are also various ways to insure thatthe accumulation of great fortunes is notequivalent to the augmentation of eco-nomic decision-making power.

For another, it is advisable to give somefresh, serious thought to the relationshipbetween economic inequality and the gene-ral welfare, as well as that between in-equality and democracy. It is not neces-sarily the case that economic inequality isalways a barrier to increasing the welfareof the majority of people and achievingdemocracy. The social history of the pasttwo centuries in our part of the world re-cords enormous advances in the well-beingand life chances of most people, but thoseadvances did not go hand in hand with aradical dismantling of economic inequality.And where democracy did succeed in theserespects, its achievements were not basedon economic equality.

It is worth pondering the fact that, asPiketty shows, the reduction of inequalityin the first half of the twentieth centurywas accompanied by profound crises,widespread misery, the collapse of democ-racy, and death on a grand scale; indeed,declining inequality was internally linkedto these catastrophic aspects of modernhistory. It would be wise to reflect upon orsimply bear in mind the circumstancesunder which economic inequality hasstood in the way of the general welfare andwhen it has not. That is not Piketty’s sub-ject, but his book suggests those lines ofthought.

Jürgen Kockais Professor (emeritus) of history at the Free University of Berlin and editor of NG/FH.He was also presidentof the Social Science Research Center (WZB) in Berlin. In September his latest book will be published byJ.H.W. Dietz Nachf. under the title Arbeiterleben und Arbeiterkultur: Die Entstehung einer sozialen Klasse.kocka@wzb.eu

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Wolfgang Merkel directs the »Democracyand Democratization« section at the SocialScience Research Center in Berlin (WZB),and is Professor of Political Science at thecity’s Humboldt University. In 2015, Sprin-ger VS published his edited anthology, »De-mokratie und Krise: Zum schwierigen Ver-hältnis von Theorie und Empirie«. ThomasMeyer conducted the interview.

NG/FH: In some sense the diagnosis of a»crisis of democracy« has been in the airfor a long time.But in recent years the issuehas become more urgent, to the pointwhere people are asking whether even thecore countries of the OECD still have»genuine« democracies. Those concernsculminate in the observation that, in prin-ciple, our countries may be incapable ofreform when it comes to crucial matters ofeconomic power, and that in the futurethey will be little more than pawns of eco-nomic power-wielders. What would be avalid criterion for judging democracy’squalities and gauging the state of its crisis,and what is the proper response to thecurrent situation?

Wolfgang Merkel: These diagnoses are notso easy. Very few of them are capable ofclarifying the criterion they use when theyrefer to democracy. Is it normative, put-atively »genuine« democracy? Is it a long-lost golden age of democracy? Both ofthose criteria would be mistaken. There isno »one« genuine democracy. Would it bedirect or representative democracy? Wouldwe like to have more consensus and in-clusion, or are we willing to trust in theefficiency of simple majority voting? Dowe prefer a centralized or a federal demo-cracy? Do we want to go the Swiss routewith its consensus rules, or do we prefer

the »Westminster model« with its un-alloyed majority rule?

The assumption that there once wasa better age of democracy indicates histo-rical amnesia. When was that supposed tohave been? In the Sixties or early Sev-enties? Let’s ask women, ethnic minorities,and homosexuals in the USA, Germany, oranywhere else whether they see things inthe same way. Democracies today face ahost of problems,but on the whole they areby no means any worse than they were inwhichever past you care to name.

NG/FH: So right now what are the mostsignificant democracy-related problemsthat are facing our countries? Hasn’t dereg-ulated, globalized capitalism in fact forceddemocracy back on the defensive acrossthe board?

Merkel: I would agree without hesitation.Led and pressured by the United States,the democracies have removed most ofthe boundaries that used to restrain capi-talism, and they have done so consciouslyand negligently. This is the case in botha spatial and substantive sense. By dereg-ulating markets, especially the financialmarkets, democracy has emasculated it-self. When it comes to crucial issues ofmonetary, budgetary, and tax policy, it isthe powerful investors, banking crises, andsupposedly practical constraints that aresetting the tone, not democratic majorities.In point of fact, democracy has becomemore market-conforming. But if one wantsto risk greater democracy, one has to turnthe tables and finally make markets (again)conform more fully to democracy. Look-ing at the big picture, it is true that democ-racy has made progress in some areassuch as minority rights, gender equality,

A Conversation with Wolfgang Merkel

»Democracy’s Problem is not the Crisisbut the Triumph of Capitalism«

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and tolerance toward the »other«. Butthere have also been setbacks in the areasof democratic control over the economyand the creeping exclusion of the lowersocial strata.

NG/FH: In what ways have the Europeandemocracies changed over the past threedecades in their approach to capitalism?And what are the true causes of thesechanges?

Merkel: In the wake of the stagflation ofthe Seventies during the previous century,the Keynesian paradigm of state respon-sibility for maintaining demand lost its

magic. Monetarism, supply-side economics,and fiscal conservatism swept the field,first in scholarly circles and then in politics.Markets allegedly had to be liberatedfrom the productivity-suppressing anddistorting regulations of »politics.« Oncethat had been accomplished, creative de-struction would open up new potentialareas for innovation, while supply and de-mand would find a dynamic equilibriumon their own. That became the dominantopinion. Entrepreneurs and citizens wereto be freed from the unreasonable de-mands of high taxation. Then the new eco-nomic dynamism would benefit even thelower classes through the so-called trickle-down effect, by virtue of which prosperitywould eventually extend down to the low-est strata of society. Nearly all of the eco-nomies in the OECD world followed thisscript. Even social democratic govern-ments got in the act.

NG/FH: Economies have become increa-singly open to transnational institutionssuch as globalization and the EU. Whatroles did these different transnational levelsplay in defining this process? And what roledid conscious political decision-making

play, e.g., the orientation toward an ever-more-prominent neo-liberalism that char-acterizes our era?

Merkel: Economic denationalization hasabetted this process alarmingly, especiallyin respect to democratic control over im-portant economic parameters. When fi-nancial and commodity markets becomeglobal, the nation-state loses its ability toinfluence them. The politics of nationalbudget-setting, a key element in the effortto create a fair society, also loses some of itsimportance. The EU of course is driven byits commitment to the Competition Law.For that reason it has not turned out to be

a bulwark against the de-politicization ofmarkets, but instead something like theirTrojan Horse.

NG/FH: For some time we have been ob-serving with growing concern a kind ofdownward spiral in our countries: de-clining democratic (voter) participationamong the lower classes and those who areprecariously employed, minimal inclusionof their interests in high-level politics,then further decline in participation ratesamong the »losers« in the political process.How, exactly, are these two factors cor-related?

Merkel: The fact is that, over the last threedecades, conventional political partici-pation has continued to decline in thedeveloped democracies. This holds truefor both voter participation and member-ship in parties and labor unions. The pecu-liar dilemma for democracy in this contextis to be found in the phenomenon of socialselection. The bottom third of society hasdisengaged from politics. The middle andupper classes stick with conventional poli-tics or perhaps they seek out new orga-nizational forms. When they are young

»The bottom third of society has disengaged from politics.«

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they join NGOs; when they are older theyget involved in civil society or ecologicalcauses, or maybe they fight the upgradingof railroad stations. We are heading fora »two-thirds democracy« in which thelower strata are underrepresented, whilethe middle and upper classes are over-represented.

All this differs from the situation in theFifties and Sixties insofar as there has beenan erosion of the great collective organi-zations such as labor unions and mass par-ties that once served as crucial trustees andworld-explainers for social strata withoutmuch education. In a situation like this,people must rely on their own knowledgein deciding whether and how to becomepolitically involved. Thus, those who areremote from the world of education alsoend up estranged from the world of politics.

NG/FH: How can this downward spiral bestopped and reversed? Would new forms

of participation help here – for exampleplebiscites, a reform of the mass parties, alarger role for the Internet? Or do we haveto start from scratch?

Merkel: That is a huge problem.All of thesenice old and new forms of direct politicalinvolvement such as referenda, deliberativeforums, citizens’ councils, participatorybudgeting, or digital democracy have onething in common: In theory they promiseto enhance democracy, while in practicethey exacerbate the problem of the two-thirds democracy. Social selection be-comes even more rigorous, and the lowerclasses remain shut out. This is true even– and especially – of the panacea para-doxically endorsed by the left: referenda.As the »referendum democracies« in Swit-zerland and California have repeatedlyshown, the results of these plebiscites usu-ally end up preserving the vested eco-nomic interests of the well-off and fre-

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quently discriminate against minorities. Itis a relief to know that, even in Switzer-land, only about 10 % of all the laws arepassed by »the people.«

The democratic innovations I men-tioned certainly could be instituted as sup-plements to representative democracy ifthey were divested of their elitist or dis-criminatory effects. But careful thoughtwould have to be given to demarcatingtheir proper spheres of competence andsubject matter for decision-making. Yeteven if those things were done, or-ganizational considerations dictate thatsuch reforms would play a very modestrole in generating necessary democraticdecisions.

NG/FH: Well then, where do we start inthe effort to reinvigorate democracy, as-suming that we won’t just accept its dwin-dling significance as something decreedby fate?

Merkel: The institutions and organiza-tions of representative democracy neces-sarily will continue to bear the main bur-den of our political community. That in-cludes political parties as well, althoughthey may never again regain the importancethey had in their heyday, the twentiethcentury. They must become more openand differentiate themselves more sharplyfrom one another. That is especially true ofthe mass parties. In our book, Demokratieund Krise: Zum schwierigen Verhältnis vonTheorie und Empirie (Springer VS), we wereable to show that few differences remain inthe programs of the major parties of theOECD world, particularly when it comesto questions of finance and tax policies.The left parties, after having been pre-occupied with cultural issues since the1970s, finally should refocus on the ques-tion of distribution. Our citizens have be-come apathetic, but they could be re-poli-ticized if substantive issues were put on thetable again. That would be the case if poli-

tical conflicts revealed clear differencesamong the antagonists, if the privileges ofthe rich and super-rich were questionedin public debates, if the United Stateswere criticized for once by democraticgovernments, if the de-politicizing notionof »practical constraints« were banishedfrom public discourse, and if we couldtalk again about the nationalization ofbanks.

NG/FH: The historic »social democraticcompromise« among business associa-tions, labor unions, and the democraticstate, reached under the direct threat of anexistential crisis in the global economy,once made possible a productive rela-tionship between a capitalist economy andsocial democracy. But today it is a paleshadow of its former self. Could one imag-ine a re-establishment of this compro-mise in the present day – or, if need be,something different in place of it? Or canyou think of other ways to revitalize demo-cratic decision-making and imbed capi-talism more firmly in its social and eco-nomic setting?

Merkel: Unfortunately, I am rather pessi-mistic about this. The »social democraticcompromise« or »social-liberal corpo-ratism« presupposes a rough balance ofpower among the three actors noted al-ready. During the decades dominated byneo-liberalism, that balance of powershifted in a direction disadvantageous tothe democratic state and the labor unions;hence, there is no longer a basis in powerpolitics for the social democratic compro-mise. The task ahead, then, is to give morepower back to the democratic state. Thatcannot be done unless we regain some ofthe territory that we have ceded to de-regulated capital. Progressive forces haveto admit to themselves that capitalism can-not be tamed by civil society, quotas forwomen among DAX [the German stockindex, ed.] millionaires, and paid parental

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leave for men. The democratic state is noteverything, but without a strong demo-cratic state our societies cannot be struc-tured fairly.

NG/FH: Do I detect a note of disdain forcivil society here, even though many ob-servers see it as their main hope?

Merkel: Not at all. But our enthusiasm forcivil society has led us to forget what it canachieve and what its limits are. Meanwhilewe have forgotten about the state or some-how concluded that it is out of date. But

the unfair distributive mechanisms of capi-talist societies can be corrected only by re-lying on the state’s regulatory instruments.Besides, civil society is mainly an affair ofthe middle class.

One more comment about quotas forwomen on DAX boards. I just can’t figureout why a female quota that enables 100economically privileged women finally toearn incomes high enough to make themmillionaires too should count as a progres-sive policy. Obviously the women on thoseboards, or at least their progressive de-fenders,are hoping for a trickle-down effectin genuine neoclassical fashion.One mightquestion whether this is going to helpwomen in the low-wage sector. On thisscore, the minimum wage policy wouldhave greater relevance, even though it maybe set at too low a level. The conclusionis that we need a less symbolic and moresubstantive politics.

NG/FH: Wolfgang Streeck has presented adiagnosis that has become rather influen-tial recently. He argues that there is notmuch hope of restoring a better balancebetween capitalism and democracy, be-cause the problems of both – capitalism inthe financial markets and parliamentarydemocracy – originate in the same eco-

nomic and social sources. Thus, he con-cludes, one cannot discern any promisingstarting-point for a campaign to restorethe lost balance.

Merkel: I share many of the convictionsin Wolfgang Streeck’s economic analysis. Ialso appreciate his leftist critique of theEuropean Union, which has acceleratedthe deregulation of capitalism and is in-trinsically more technocratic than demo-cratic. We used to expatiate on late capi-talism in the Seventies,but meanwhile capi-talism has rejuvenated itself. Democracy’s

problem is not the crisis but the triumphof capitalism. Still, democracy has not re-ached the end of its tether. Its most seriousills at the beginning of the twenty-firstcentury are the emasculation of politicsvis-à-vis markets (a self-inflicted wound)and the increasing exclusion of the lowerstrata from participation and substantialrepresentation. Both deficiencies can andmust be corrected; if they are not, a post-democratic, empty shell might be all thatis left of democracy.

NG/FH: What strategy would you considermost promising as a way of making goodon the claim that democracy should haveprimacy over the economy? And how mightwe effectively re-imbed or socially domes-ticate capitalism? Or, how would you de-scribe a realistically attainable, morally de-fensible relationship between capitalism inthe financial markets and parliamentarydemocracy, one that would work undertoday’s conditions in individual countriesas well as the EU?

Merkel: First of all, let’s be clear about onething: In the long run, deregulated marketsdestroy themselves and the social cohesionof our society. The spirit of the EuropeanUnion cannot be defined primarily in terms

»We need a less symbolic and more substantive politics.«

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of its Competition Law. Nation-states mustrefuse to cede competencies to the EU aslong as the latter has not established demo-cratic standards comparable to those of itsmember states. That is not anti-European;it is pro-democratic. Financial marketsmust be subject to stringent controls. It ispointless to wait in the hope that theUnited States or Great Britain might goalong eventually. We have to see what canbe done on a national level and, if need be,on the European level.

Last but not least, Germany must in-vest extensively in education, especially foryoung children from the lower classes. Suchan investment would furnish particularlegitimacy to additional taxation imposedon the rich and super-rich. Without astrong and just taxing authority, there is noway to create a fair society. Social de-mocracy should be more courageous andtackle the distribution issue more ener-getically before the latter gets out of handand becomes an insoluble class issue.

Released for the Friedrich Ebert Stiftung byKurt Beck, Sigmar Gabriel, Klaus Harpprecht, Jürgen Kocka,Thomas Meyer and Bascha Mika

Editorial StaffThomas Meyer (editor-in-chief and responsible),Lewis Hinchman (English language editor), Jana Heisel, Dirk Kohn,Klaus-Jürgen Scherer

Editorial Department of NG/FHFriedrich Ebert Stiftung, Hiroshimastrasse 17, D-10785 Berlin,Tel: 0049 30 26935 7151,-52,-53, Fax: 0049 30 26935 9238,www.ng-fh.de, ng-fh@fes.de

PublisherJ.H.W. Dietz Verlag and Successors, GmbHDreizehnmorgenweg 24, D-53175 Bonn,Tel: 0049 228 184877-0, Fax: 0049 228 234104, www.dietz-verlag.de

Design Planningtiff.any Ltd., Berlin

Typeset, Lithography, Printing, ProductionLimberg Druck GmbH, Kaarst

To order individual copies contactheidemarie.pankratz@dietz-verlag.de

ISSN 2194-3095Pu

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